The Automotive Industry Chain
The automotive industry is an important and ever-changing industry — one of the most talked about in recent times due to its constant evolution. As technological advancements in the automotive industry lead to simpler and more efficient solutions, the manufacturers and suppliers of vehicles and components must stay in-tune to stay competitive. The structure and interrelationship between the different players in the automotive industry can be viewed and understood as an industry chain, a concept that refers to the interconnectivity of players and how the output of one feeds the input of the next. Explaining the automotive industry chain means looking at each of the players and how their various roles and strategies combine to create a specific value chain.
The automotive industry chain begins with steel, aluminum and rubber suppliers, followed by safety companies that provide components like airbags and sensor companies that provide technology like lidar and radar. After these core components have been manufactured, they are supplied to vehicle manufacturers and relevant assemblers who then move on to integrate the parts into vehicles. After the vehicle is engineered and manufactured it goes through several regulatory tests before it can be released to market. Subsequently, automobile dealership representatives meet customers, handle sales and service needs and provide market feedback to the manufacturer.
Manufacturing and supplying components are often just the beginning. Automotive suppliers need to push out beyond their core activities and become more customer-centric to maximize their value chain. Understanding how customers use and interact with their vehicle is essential for automakers and suppliers alike. Suppliers should move beyond products to think about solutions that complement their brand value and enable consumers make the best possible use of their technology or solutions. This might include understanding how their components respond to various driving conditions or help vehicle owners to maximize the efficiency or power of their vehicle.
As technology in the automotive industry continues to advance, the suppliers that stay competitive in the automotive industry chain will those that understand and adopt customer-focused business models, leveraging technology and data to discover new ways to create value for customers. Similarly, manufacturers should leverage technology and data to optimize their design and engineering processes, enabling them to produce more efficient and reliable vehicles at faster speeds. At the same time, data-driven analytics should also be used to understand customer behavior and needs to ensure that the customers voice is heard each step of the way.
Finally, automotive players should look to evolve their after-sales offerings, leveraging service and subscription-based models that enable customers to meet their service needs and enhance the overall ownership experience. Automotive industry players should strive to continually innovate and develop new solutions and offerings to ensure that their products and services remain relevant to the changing automotive market and consumer trends.
The key to succeeding in the automotive industry chain is for each player to understand the different roles each other plays and to cooperate and interact as per their individual duties and responsibilities. This means that manufacturers and suppliers should work together to develop components and solutions that meet customer needs and enable them to own a superior driving experience. At the same time, automotive industry players should leverage technology, data and analytics to remain competitive in the market. Ultimately, the automotive industry chain is an interdependent ecosystem and it is only through collaboration and a customer-first mindset that it can achieve success.
