The Real Challenge Facing the Automotive Industry and the Way Forward

December 4, 2018

Globally, the automotive industry has grown more attractive than ever before. All kinds of new and exciting technologies such as powertrain systems, mobile connectivity, advanced driver-assistance systems, maintenance monitoring, and several others are attracting more buyers in the automotive industry. In the eyes of several industry experts, this sector will grow at a steady rate, given the stable rate of oil prices and the advent of newer technologies. However, this does mean that we can completely rule out some critical automotive industry challenges. The success of automotive companies largely depends on how they take advantage of some surprising opportunities that come their way to effectively tackle some serious automotive industry challenges that they may have to face.

Industry players must make huge investments in meeting tightened mpg and emissions requirements, develop new powertrains, continue to expand in markets around the world, and develop new vehicles to feed changing transportation needs.

While the feasibility of advancements such as autonomous vehicles is still in talks, many in the industry feel that the vision of self-driving vehicles populating the roads in the next decade is highly optimistic. Especially after several cases of loss to life and property reported from autonomous vehicle accidents, looks like further advances in technology and affordability are required until we are finally ready to welcome such innovations. However, focusing so much attention and resources on the captivating prospects of the self-driving world may make for good reading, marketing, and investor interest. But it could prove to be a dangerous distraction for the auto industry and the real automotive industry challenges faced.

Automotive Industry Challenges

Emissions and fuel consumption requirements

This is perhaps one of the most pressing automotive industry challenges that players in this sector are undergoing. Adhering to the increasingly restrictive emissions and fuel-consumption requirements in the western world is becoming a hurdle for automakers. One might think that the easiest solution to this can be to build a single car model that adheres to these requirements. However, In the US, an automaker’s entire model lineup, including SUVs and light trucks, has to maintain an average level of higher mpg and lower emissions. Currently, automakers are expected to have to improve fuel efficiency by at least 20 percent and this is expected to shoot up to 60 percent by 2025, depending on the company and regulation. Request more information to gain detailed insights.

Labor challenges

The ongoing economic growth and recent significant investments and demographic effects have resulted in some major changes in the labor market, consequently becoming one of the major automotive industry challenges for companies in this sector. This has caused major employment issues including lack of skilled employees, strong competition for experienced specialists, increasing salary costs, rising recruitment costs, and retention issues. Infiniti Research’s employee intelligence solution has helped several clients overcome such automotive industry challenges. With our solutions for the automotive industry, our clients in this sector were able to adjust the compensation packages, attract more employees, identify locations with the right workforce, and gain better target potential hires.

The way ahead

In today’s highly competitive world, automakers that position themselves in the right manner will prosper and do a better job at tackling several automotive industry challenges. To establish this, companies need to chart out a clear plan as to what they expect to achieve in the next 5 years and carefully choose the technologies that they want to invest in. Autonomous or self-driving vehicles cannot offer a near-term solution for all the automotive industry challenges. Companies along the automotive value chain must realistically decide how much of their valuable management attention and financial capital they are willing to deploy on the longer-term speculative opportunities and how much on the more immediate automotive industry challenges

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