Jens Haas, managing director and automotive expert at AlixPartners, spoke about the ongoing and anticipated future challenges for the automotive industry regarding current struggles and serious changes. Mr. Haas based his keynote speech on the challenging year of 2019 for the automotive industry, as global volumes have gone down by 5% since 2018. However, he explained that despite challenging markets in 2019, a slow recovery was still possible from 2020 onwards, which is strongly dependent on China. Mr. Haas explained that China’s automotive capacity utilization is trending down below healthy levels (70%) since 2016, with significant overcapacity.
Due to current regulations, original equipment manufacturers will struggle to make the 2021-set CO2 targets and a disruptive pace is required to hit 2030 targets. These regulations not only include CO2 targets but also the current discussions about trade tariffs, dependency shifts through new mobility concepts in cities and diesel bans; all interfering with and influencing the complete automotive industry and all its co-dependents.
Mr. Haas further gave an outline to the fundamental changes in the customers’ expectations that are shifting to personalization, integration, and more eco friendliness. Performance, brand loyalty and the importance of ownership are now very challenged in comparison to past years and decades. Customers appear to have shifted more towards flexibility, eco-friendliness, and convenience as their focus points.
Mr. Haas illustrated the future of mobility with the image of CASE (Connected Autonomous Shared Electrified); the key drivers that will significantly change the industry and require heavy investments. In his opinion, electrification and automatization require investments of at least $275 billion within next five years. He sees a future within exploring the investment opportunities of the elements of CASE and further elucidated how CASE is driving partnerships in the industry as CASE-related partnerships have already grown by 56% in 2018. While automotive M&A activity dipped slightly in 2018, CASE- related deals climbed to 55% of all deals. He concluded that CASE is having a significant impact on the overall vehicle landscape and suppliers need to proactively adjust their portfolios.