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What’s next for the automotive industry?

automotive industry sharenow

A look at some of the key drivers reshaping the Automotive supply chain.

 

Continued electrification

As we begin to emerge from the Covid-19 pandemic the world’s major automakers are ramping up their carbon commitments to meet Global zero emissions goals; whilst simultaneously trying to recover from the economic downturn.

Entering into what is set to be one of the sector’s biggest decades yet, new players such as Lucid, Rivian, Chery and BYD join them in expanding their EV passenger car ranges, with the likes of Nikola and Rivian spearheading change within the commercial truck space.

Connectivity

A key feature of the electric automotive revolution involves putting the customer experience centre stage. Today’s drivers want to browse, spec and buy using online sales tools, and are looking for vehicles with connected features which improve and engage with their digital lives.

Autonomous vehicles

Self-driving cars have been on the horizon for a while now, and that’s where we believe they will probably stay for a little longer, at least in terms of mainstream adoption.

However, it’s really not a case of ‘if’ but ‘when’. Mobility platform businesses such as Uber, Lyft and Gett all have business models that ultimately rely on autonomous vehicles, and big tech giants including Google, Apple and Microsoft continue to work in partnership with the automakers to develop this technology.

Effects on the supply chain

The traditional automotive supply chain

Changes to the way vehicles are designed and built to meet new consumer demands and regulatory requirements will continue to have a significant impact on the traditional supply chain.

Electrification alone will mark the end for lots of traditional car parts such as the engine, transmission, intake, exhaust components and fuel systems.

Other components will become ‘electrified’ such as steering, regenerative braking, and HVAC systems, whilst some are completely new – including drive motors, battery and high volt components, for example.

Read our article on Automotive Fasteners and the EV Revolution.

The current supply chain

As well as the new manufacturers already discussed, we are also seeing the emergence of completely new types of companies and new tiers within the supply chain, such as software providers like Google, Apple, Cisco and IBM. Established suppliers are also repurposing, diversifying and moving between tiers.

The future supply chain

Two critical trends – vehicle control (driver or autonomous), and vehicle ownership (private or shared) are likely to shape continued supply chain disruption and could well see service providers such as Uber, Lyft and BlaBlaCar supplant the OEM’s at the top.

Whilst margins are maybe too small for the likes of Google to take the role of manufacturer, it’s not beyond the realms of possibility that a brand like Apple who traditionally seeks control of both hardware and software could become involved in the design of parts or even complete vehicles.

JOINED UP THINKING – global sourcing, single supply.

In the shorter term, we all need to focus on building the future of the automotive industry. OEM’s are under increasing pressure to bring innovation to market and therefore Tier 1 suppliers need to be innovative, highly responsive and agile. Whilst this takes substantial investment, the pandemic leaves car makers simultaneously needing to reduce costs to maximise margin.

AUTO-FASTENERS’ global sourcing / single supply model helps customers achieve this by delivering both reduced administration and management cost, and increased operational and logistical efficiencies.

 

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    Auto-Fasteners Ltd (AFL) is a Tier 1 automotive supplier. We globally source, stock and distribute OEM and TS16949 quality fasteners, small parts and engineered components. We can satisfy OEM production line and aftermarket requirements for both car and commercial vehicles.

    Phone: +44 (0) 1926 814600
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