Structural Changes in the Automotive Industry: How Main Actors Are Reacting to Industrial Swings

Over the past two decades the automotive industry has faced some very challenging changes due to becoming an increasingly mature industrial sector, at least within the Triad, i.e., Europe, North America, and Japan . With the shortening of vehicles life cycle and the accelerated necessity to introduce new models into the market to try and face the overall lowering of profit margin , OEMs, and their collaborators (Tier-suppliers) must introduce new mutual product development processes, and, at the same time, must engage in substantial financial resources to keep up with the political strategies of the statecraft. Through a thorough literature review, this paper aims at investigating four of the most representative paradigm changes within the global automotive industry, i.e., i) the increasingly widespread Industry 4.0 with its main design principles and enabling technologies , ii) the transition from the Internal Combustion Engine to a battery-powered one , iii) the passage from a pure BTS-model to a BTO one - a hybrid forecasting method to responding to the ever growing need for customization -, and, iv) the supplier sectors, which has attracted the attention of scholars since its inception during the late 80s . After carefully examining different scientific articles concerning the above industrial sectors, we have tried to give an answer to the following research questions: Rq1: How the introduction of Industry 4.0 has contributed to making the automotive industry more competitive in its whole? Scholars have come to the conclusion that with the introduction of the CPS , in manufacturing and logistics and the IoT in industrial processes, manufacturers have managed to increase their competitive advantage, and not only, as with the implementation of Smart Factories, customers’ requirement are successfully met by manufacturing in a profitable way even a one-off product . Rq2: Is the electric mobility the miracle cure to the industry and is it reasonable to put aside all the technological advancement reached with the ICE? Batteries employed in EVs are expensive to manufacture as raw material are to be extracted and processed and the production process is highly onerous. Literature does suggest that, since the battery represents around 35-45% of the vehicles total production costs, it might be important in engaging in battery circular economy, especially in the European industrial reality . Since raw materials are non-renewable and will, soon one day, come to an end, it might not be much intelligent to replace a provisional source of energy (fossil fuel) with another one (lithium, cobalt, etc.). Rq3: Is BTO the key to the industry’s salvation and could it help manufacturers rise their margin call? Producing vehicles according to a BTO-model allows manufacturers to engage lesser working capital and to reduce stock material along the production line, it authorizes fewer discounts in sales and helps manufacturers reduce fixed costs . Nevertheless, resorting to this kind of production system requires important investments in the production system to avoid the inevitable increasing cost of production due to production discontinuity. It would have consequences upon the supplier sector, too, which would face a general lowering of orders and an inflation of price tags, which would have a direct effect upon the final consumer. All this, without considering the social aspect, which would provoke a general lowering of the acceptability rate which woul