Question

Are the firms within the automotive indus­try innovative or not? Explain.

Answer 1

Autonomous driving, e-cars, digital services and mobility platforms: the automotive industry has a history of innovation and turbulence, but this has never been the case. High product quality and brand credibility still matter, but as selling points they have lost their luster, while qualities such as technological innovation and straightforward ownership costs are rapidly moving to the top of what buyers want from a vehicle. Industries will have to reinvent themselves technologically and rapidly in order to maintain a leading position in the automotive market and thrive for the long haul. Faced with cost pressures, the next generation of leaders have begun to embrace some common principles as they reinvent themselves.
Many businesses have been underinvesting in new technologies for years. The pilot project days and electronic laboratories are over. Instead of dabbling with mobility devices on a small scale, for instance, the next-gen car manufacturers aspire to become world leaders in electric drives and make similar investments to move their core business forward. It's an entirely new tack — push forward or die.

The reinvention mission is not limited to research and development. Many management teams are increasingly concentrating on redefining the core business of the future and selecting approaches to differentiate their businesses from the competition. Successful implementation of this methodology allows managers to chart the entire company's development strategy. Every single company has the full set of skills in new technologies and approaches as the market is increasingly evolving. By acquisitions, networks and alliances, they fill in what the new leaders lack in know-how. They recognize that it falls short and takes too long to wait for this know-how to grow organically.

There is no question that for carmakers and manufacturers, electromobility and digitalization face immense challenges. Nevertheless, businesses with ambition and dedication can exchange their traditional R&D principles and methods in order to turn themselves with the required creative force. A leadership team that sets the course by defining a clear roadmap for transformation and a systematic program for innovation will allow the company to reinvent itself. The industry's future requires nothing less.