Automotive At A Make-Or-Break Moment

Automotive is a sector under sustained structural pressure, not just in fiercely competitive and volatile downturn markets, but one undergoing mass technical transformation towards EVs and autonomous driving. 

Expectations of customers are changing radically as a result, but can now be satisfied sooner by a wealth of competition. The advantage of this pace is clear as one in 10 cars sold in Europe are from Chinese brands.

As part of our Leading Through Uncertainty series, Clare Glackin, Head of our Industrial Practice in Europe, Middle East and Africa, joined Emanuel Pfister, Head of Automotive Practice and Managing Partner in Germany and Switzerland, to explore the global automotive industry’s perfect storm and the criticality of adaption for future survival. 

The conversation outlined:

• Why speed to market is increasingly pertinent.
• The significance of an adaptive technology strategy.
• Why talent will be a key differentiator.

Collaboration and Speed to Weather Volatility

Leaders now need sharper, more effective communication with employees and stakeholders. They must embrace real team orientation, not just inside their organisations but through stronger cross company partnerships. Joint ventures are increasing as firms share development costs. An example of this is car makers collaborating with Nvidia on chips and microprocessors.

This pressure is amplified in the current climate, as Emanuel Pfister explained: “Traditionally, car development cycles last five to seven years, whereas some manufacturers in Asia have reduced this turnaround to just 18 months. Naturally, this presents significant challenges to Western brands as they work to answer to these changes.”

Leading Change in a Heritage Brand

Flexibility is essential, as adaptable powertrains and production processes help established car makers shift operations in line with consumer trends.

However, implementing broader transformation can be more challenging for established, legacy marques whose heritage and ownership structures can bring added layers of complexity.

As a solution, long-stay brands need to take learnings from the new players as they try to adapt to the so-called ‘China speed’. Where historically this worked in reverse, there is a lot of resistance still, but there is no other option than to adapt.

Executing the Right Technology Strategy

Currently, only one European car maker produces its own batteries, while the rest are fully dependent on Asian suppliers.

Investment in robotics and automation is accelerating across Europe, the U.S. and Asia as technological capabilities deepen. Customer expectations are shifting fastest in Asia, where the focus is less on drivetrain performance and more on in-car technology and entertainment; an area European manufacturers can adapt to quickly.

Future Outlook and Talent

Recent conversations with German automotive leaders tell us the next two years will be decisive. Those able to adapt within this timeframe will stay competitive, rather than being overtaken. 

Odgers’ Automotive Practice support clients across every major automotive market. Our specialists span the U.S. and South America, as well as key European hubs including Germany, Spain, France, Italy and Eastern Europe, alongside strong coverage across APAC. With our unrivalled global network, we identify and develop exceptional talent needed for scalable industry transformation.

Explore our ‘Leading Through Uncertainty’ collection here. 

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