How to prioritize innovation in the great automotive value shift

Advanced Manufacturing and Mobility Business Minute

In this episode, EY Global Advanced Manufacturing and Mobility analysts Gaurav Batra and Anuj Chandna discuss the great value shift taking shape in automotive sector.

The automotive industry is experiencing a significant shift in value creation, moving from traditional sources to emerging technology-driven opportunities. As this takes place, the full impact and the necessary responses from companies remain uncertain. It is important for auto players to identify emerging areas of value and assess whether there is sufficient technical capabilities and talent to compete in these new areas. It is also crucial to determine how they can adapt to not just endure, but also thrive during this period known as "the great value shift."

To gain a deeper insight into evolving market dynamics, the EY organization conducted a detailed industry analysis, focusing on the emerging opportunities across the automotive value chain. The survey pinpointed 40 value pools that have been grouped into three segments: traditional, transitional and growth. The traditional category consists of well-established sectors that form the industry's foundation. The transitional segment indicates the early stages of a shift toward emerging opportunities, including hybrid vehicle production and new models of car ownership. The growth pool represents the forthcoming wave of value generation that will reshape the economics of mobility.

Gaurav Batra, EY Global Advanced Manufacturing & Mobility Analyst Leader, and Anuj Chandna, EY Global Advanced Manufacturing & Mobility Analyst, delve into the details of the EY study and highlight the three mega value pools within the growth category that hold the most significant revenue potential for automotive companies.

Key takeaways:

• Companies need to reframe strategies to align with the evolving mobility landscape and create agile organizations that can adapt swiftly.
• Industry players must adopt creative workforce strategies to attract and retain skilled professionals. Approaches, such as strengthening employer brand, collaborating with academic institutions and offering scholarships, are key to building a resilient workforce of the future.
• Businesses must refine their portfolios in response to the value shift, with a focus on customer needs and the transformation of their operating models to be agile and responsive.