Everybody in the automotive industry feels what is happening: this industry, started more than a century ago, was the primary main driver for optimization. Optimization of performance, of design, of real and perceived quality, of footprint. Everybody was benchmarking to analyze in detail what their competitors were doing—the competition and the technology were well and perfectly known. What was called ‘R&D’ was in fact more development than research. Purchasing (i.e., cost) was king at the automakers, and innovators were sometimes neglected.
That was then; this is now: we are in a new world where innovation, partnership, and money are essential to survive. New competitors from the Silicon Valley tech industry and Chinese giant consumer and manufacturing concerns, felt by legacy automakers as threats, are generating a revolution in their organisation if they want to survive.
Technological shifts are afoot with EVs and AVs, driver assistance and infotainment defining new customer needs and wants while facilitating whole new design concepts. In addition, after COVID, semiconductor shortage and now geopolitical tensions are creating new turbulence: tariffs, rare earths availability, and more. It is becoming complex to have clear guidelines from automakers, and it is impacting the entire supply chain, including our lighting ecosystem.
What was taken for granted 10 years ago has now curdled to doubts and threats. Our business is evolving faster than any other time during the last 40 years, at least. In the same day, you can see the Renault CEO speak at Le Mans about that company’s future, and one hour later announce he is resigning to go join a totally separate business. At the same time, Marelli, one of the world’s biggest vehicle lighting suppliers, initiated chapter 11 bankruptcy in USA to restructure debt.
Whoever wants to thrive in this new reality must react thoughtfully, with the likes of:
• Closer relationships among automakers, tier-1 and -2 suppliers, regulators, and researchers. The Tokyo DVN Workshop last week was a marvellous opportunity for productive networking.
• Building trust and respect to avoid misunderstandings or conflicts. The DVN weekly newsletters and monthly reports facilitate cross-cultural understanding and appreciation in this direction.
• Flexibility, agility and positivity, considering the main needs of automakers: faster development, lower cost, and constant innovations.
There is always the sun after the storm…assuming you brought your umbrella!
Take care in this turbulent period, especially for my friends at Renault and Marelli.
