Tag: Automotive Market

Automotive market

Weekly Round-up: Recent Developments in the US Automotive Market

The rising popularity of the populist sentiment, embodied by the recent events in the United States, signals the beginning of a period of turbulence for firms operating in the automotive market. Government’s policies have made it clear that regulations and trade policies are now open to discussion and even removal. Protectionism is on the rise, with populist leaders declaring their intent to return jobs and operations to their countries, especially regarding automobile companies and their manufacturing bases. The government’s aim to review and change existing trade and regulatory policies to fit its strategic economic goals may decline the growth of the US automotive market in the near future.  

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Top Trends in the US Automotive Market

New fuel efficiency standards

The new fuel efficiency standards are being targeted by the US government. In a meeting with the automakers, the government made its intention clear to modify car efficiency standards mandated by the previous administration to reduce the perceived regulatory burden. Such efficiency standards can threaten almost one million jobs in the automotive market.  However, a few analysts believe that lowering emission targets may help companies in the automotive sector to sell more light trucks, which forms a major part of domestic car sales for the manufacturers. Such changes will certainly add to the complexity of the regulatory environment, leading to additional operational costs, and impact US vehicle sales.

Revised tax policy 

Companies in the US automotive sector may benefit from the favorable tax policies that lower corporate taxes and provide incentives to ensure large investments do not move offshore to competitor markets. The administration’s commitment to bring car manufacturing jobs back to the US and ensure large investments are made within its borders will aid in the growth of the industry. Due to this, major companies will now reconsider investing in American states considering it as a possible strategic opportunity.

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Connected cars

The safety-critical nature of autonomous vehicle technology and costly nature of autonomous vehicle maintenance systems may push consumers away from independent car services and towards the OEMs themselves. Moreover, OEMs can use the car’s ability to make recommendations to consumers to nudge them towards OEM-approved service centers and replacement parts. A process for certifying equipment and service providers by evaluating their supply chains and pushing these services online may further assist consumers looking to save money by buying third-party components.

Inability to identify the latest trends in the US automotive market can reduce companies’ global automotive industry market share. Stay a step ahead by requesting a free demo of our procurement platform and gain exclusive insights regarding the global automotive market size.

IoT and AI Technologies

IoT and AI Technologies may continue to revolutionize companies in the US automotive market. These technologies may unleash unprecedented transformations across vehicle and device connectivity. Autonomous driving, electric powertrains, and shared mobility may make the driving experience safer, more productive, and less fraught for consumers while addressing concerns about privacy.

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5 Automotive Industry Challenges That E-commerce Can Solve

The digital revolution has presented companies in various industries with a pool of opportunities, and the automotive industry is no exception. Though several players in the automotive sector are venturing into online car sales, the success rate is comparatively lower. The main reason being, vehicles are a long-term investment that people make, so the look and feel factor which lacks in online sales is an essential factor that influences a purchase. However, the automotive aftermarket which is a subset of the automotive industry is predicted to garner greater benefits through e-commerce.  A good e-commerce solution can resolve several age-old problems for automotive parts suppliers, manufacturers, and retailers. Here are some of the challenges thatSE_Demo2 players in this sector can overcome with the help of e-commerce:

Enhanced order processing

The automotive industry deals with orders of auto parts that typically comprise a wide range of components and customizations. As the complexity of order increases the likelihood of manual processing errors are also high. To stay in control of product data, companies must build a web store that is linked to their ERP system. This helps to automate processes, simplify them, and reduce the margin of error. The reason being, web store uses your ERP’s business logic and data. Also, It ensures that the information that is fed into your web store is available directly in your ERP.

Seamless information exchange

Automotive industry players who rely on e-commerce can gain real-time access to the inventory information, product details, and client information in the ERP through the web store. This will facilitate both the clients as well as the sales agents to quickly view the order, download the invoice or to track the shipment. This is one the best ways to simplify the company’s order processes.

Simplified product search

 Helping the clients find the right auto parts that suit their requirements is one of the key challenges the automotive industry faces. Narrowing down a vast product catalog to find a single part is an excessively time and effort consuming process. If the customers do not quickly find what they are looking for, it could result in bad goodwill for the company in the long run. An e-commerce platform that successfully integrates web store with the company’s ERP allows the online product search to be based on the model, make, and year of the vehicle, rather than the article number. This puts the power in the customer’s hands, giving them ease, flexibility, and convenience in making the right choice.

Reduces payment and shipping errors

Automotive companies have many complex variables to consider with every order, such as special conditions or specifications, payment options, and the shipping requirements. Especially in the case of bulk orders or B2B orders, a lot of custom work can be involved. An e-commerce platform offers the freedom and flexibility to provide all of the necessary options and information during checkout, which facilitates even custom orders to be placed online by the customers. This minimizes the payment and shipping errors that are highly likely to happen in the case of bulk orders.

Promotion of related products

An e-commerce platform presents a myriad of opportunities for automotive industry players to cross-sell and upsell their products and consequently boost the overall sales. With the help of an integrated web store, related products can be linked through the company’s ERP. By doing this, the web store displays the related products to the customers either during checkout or when they’re on relevant product pages.

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Roadblocks in the Supply Chain of Automotive Industry: Top 5 Challenges

automotive industry

The supply chain in the automotive industry has several different aspects and is a very complex system, which makes it is essential for companies in the automotive space to keep constant tabs on their supply chain management systems. This sector has been showing an upward trend in recent times and is considered to be one of the most promising industries to watch out for in terms of technological growth and profit gains. But on the flip side, automotive companies are exposed to several challenges, some of them proving to be extremely difficult to handle especially for small and medium players in the industry. Most of these challenges are supply chain related in one way or the other. Hence, strategic supply chain management must top the priority list of companies in the automotiSE_Demo2ve industry. Mentioned below are the top supply chain challenges that are impacting automotive industry companies:

Overstocked Inventories

For every sector, it is vital to ensure that they are well-stocked and not over-stocked. Though the automotive industry has been witnessing steady growth in the past, this does not mean that companies operating in this space have to undertake extensive production. At the same time, they must also ensure that they are not understocked or face a shortage in the supply. Correctly estimating the demand and aligning the production capacity to meet the needs is indeed a challenging task for automotive players. These companies can also consider teaming up with third-party logistics partner to maintain a balance in the production and supply. Furthermore, it can help to gain full visibility of the demand and make better production decisions.

Rising Recalls

It is crucial for players in the automotive industry to understand that in the case of a recall, there are high costs associated with the process. Such failures in the supply chain services can be a long and complicated issue that can tarnish your name, disrupt the system, and affect your reputation in the market. More importantly, if your operations scale to a globally, then there is a higher risk of adverse consequences. In a sector like the automotive industry, the recalls in case of any defect to the product cannot be avoided as the customers’ safety is at stake. 

Just-in-time operations

Incorporating just-in-time strategies to the supply chain is essential for automotive companies to contain costs, especially when operating internationally. How can businesses achieve this, you wonder? They must have complete visibility of each element in their supply chain and also have access to the data necessary to create a plan for future growth. Automation of processes and full visibility at each stage are also facilitators for reducing costs and other losses.

Adaptability to change

Change is inevitable irrespective of the industry that you operate in. In a rapidly growing sector like the automotive industry, constant changes are happening round the clock. Companies in the automotive space must prepare themselves to be flexible in adapting to these changes. Automotive industry players must be able to predict high and low demand seasons accurately and adjust their supply chain accordingly to meet the demand.

Abiding by environmental ethics

The supply chain in the automotive industry is bound by a multitude of quality standards and regulations that are mandatory to follow. In the case of companies operating globally, they must be aware of the laws and ethics being practiced by the countries that they operate in. This would help them avoid getting into regulatory issues in the long run.

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Spend Analysis Helps a Leading Automotive Manufacturer to Analyze their Marketing Spend

Category Overview

Globally, the automotive industry is witnessing impressive growth in their overall sales performance. Also, with the rising demand from emerging economies, the automotive industry is shifting toward better investments in R&D to improve their profit margins. To stay competitive and enhance their offerings in the manufacturing space, renowned manufacturers in the automotive industry are leveraging solutions that would help them in understanding their marketing spend. Spend analysis helps manufacturers gain real-time information on spend data and potentially identify opportunities across niche and target segments. Moreover, a robust spend analysis solution also helps manufacturers to effectively manage their maverick spend and create a robust supplier relationship.request free proposal

To gain better visibility into the business spend, organizations in the automotive manufacturing space are approaching companies like SpendEdge. SpendEdge’s spend analysis solution helps businesses in the automotive space to understand the current state of spend and devise a medium-term spend strategy. In addition, spend analysis can further assist the client to improve their process efficiency and enhance supplier negotiation.

Procurement Pain Points and Insights Offered

A renowned automotive manufacturer was facing predicaments analyzing their marketing spend. The client wanted to gain an accurate, complete, and detailed analysis of their spending patterns. Also, the client wanted to leverage spend analysis to gain a better understanding of compliance issues and the market’s performance. The primary objective of the engagement was to identify the saving-opportunities and develop efficient sourcing, budgeting, and planning strategies.

With an eye on gaining better visibility into the spending patterns, SpendEdge’s spend analysis experts followed a comprehensive research methodology by compiling information form a wide array of primary and secondary sources. Also, the spend analysis experts further carried out qualitative and quantitative data analysis to further understand the spending patterns of the client in the automotive industry.

Also, SpendEdge’s spend analysis solution helped automotive industry clients to harness their limited capital resources and improve their return on investment. The solution further helped the client relatively stay ahead of the competition and improve efficiency in capital outlays.

Fundamental questions answered in this spend analysis study include

Sp- Spend00

The Business Outcome

With the help of the spend analysis study, the client was able to profile the suppliers and develop robust recommendations in terms of savings and supply base consolidation. Furthermore, this solution also helped the client identify potential opportunities in the automotive space and effectively allocate their financial resources to reduce procurement spends.

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Supply Chain Analysis Helps an Automotive Industry Client Improve Forecasting Capabilities

Category Overview

Over the past few years, players in the automotive industry have started working towards improving supplier relationship and building trust with suppliers to boost their profits and ROIs. Additionally, automotive industry players are deploying robust supply chain analysis studies to establish an effective procurement strategy and improve the quality and delivery of supply chain activities. Supply chain analysis also helps firms in the automotive industry space to keep a real-time track of supply chain activities, thereby creating a flexibility into the movement and direction of the product offerings.

Moreover, the supply chain analysis solutions offered by SpendEdge, help clients efficiently allocate resources, improve customer delivery, and streamline after-sales services and support.

The Procurement Pain Point and Insights Offered

A renowned global automotive industry player was facing predicaments in identifying the inefficiencies in the supply chain and devising effective strategies to speed up their procurement and sourcing process.request free proposal

To cater to the precise business requirements of the client, SpendEdge’s supply chain analysis experts tailored a comprehensive research methodology, which included primary and secondary research coupled with quantitative and qualitative data collection method.

This supply chain analysis engagement, helped the automotive industry client assessed their supply chain capabilities and compared efficiencies to that of their peers. They also identified their major areas of spend across the supply chain and office locations. This helped them gain a competitive edge over their peers in the automotive industry.

Fundamental questions answered in this supply chain analysis engagement include

Automotive IndustryBusiness Outcome

This supply chain analysis engagement helped the automotive industry client cut down their overall spend across the supply chain. The client was also able to identify the current inefficiencies in the supply chain and was able to evaluate the overall buyer and vendor performance.

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Cost Model Analysis Helps an Automotive Lighting Manufacturer to Understand the Cost Mix of Suppliers and Achieve Better Cost Savings

Category Overview

Lately, the automotive lighting industry has been witnessing robust growth due the rise in the demand for automotive vehicles and cost-effective and energy-efficient lighting systems that enable a safe driving experience. Additionally, the recent increase in the purchasing power of individuals is also creating more opportunities for the growth of this industry. However, according to the cost analysis experts at SpendEdge, the cost of today’s automotive lighting systems are greater than those used earlier. Moreover, it has been noted that the increasing use of LED technology is bringing overall costs down, but further economic streamlining will be required to achieve a strong foothold in this market space.

Aas a result of such challenges, automotive lighting firms across the globe have started opting for cost analysis studies to understand the cost structure and mix of the suppliers and achieve better cost savings across the supply chain.

The Procurement Pain Point and Insights Offered

A leading automotive lighting manufacturer wanted to identify the cost elements across the supply chain. Additionally, the client wanted to evaluate the impact of the cost drivers on the overall cost. They also wanted to gain insights on the cost mix implemented by suppliers to ensure low-cost raw material sourcing and better negotiation strategies. Furthermore, the client also wanted recommendations on lowest cost mix to achieve better cost savings.request free proposal

To cater to the specific category requirements of the automotive lighting company, the cost analysis experts at SpendEdge followed an in-depth two-step research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies to address the client’s issue. During the course of this cost analysis study, the automotive lighting client was able to identify and measure the cost elements across the supply chain. Additionally, the client was able to estimate the impact of each cost driver on the overall cost. The cost analysis study also helped the client gain insights on superior negotiation and sourcing strategies to source raw materials; thus, helping the automotive lighting client to achieve better cost savings.

Key questions answered in this cost analysis study include

cost analysisBusiness Outcome

The cost analysis study helped the automotive lighting client understand cost mix of suppliers and achieve better cost savings. Additionally, the client also gained recommendations on superior negotiation strategies with their suppliers to serve their customers better.

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Auto Parts Manufacturer Leverages Supply Chain Management to Identify Optimal Warehouse Space

Category Overview

Today, warehouses have become a crucial aspect of the overall supply chain as they are points where the products are stored and distributed across the globe. According to our supply chain management specialists, it has been noted that the ongoing globalization and changes occurring in areas such as reverse logistics, information technology, environmental sustainability, and overall supply chain integration have resulted in the higher preference for warehousing services.

Consequently, to retain their foothold in the market, organizations across the globe have started evolving their roles, responsibilities and strategies for the warehouses. To streamline and maximize operations at strategically located facilities, organizations have started opting for supply chain management studies. Moreover, the supply chain management studies offered by SpendEdge, help auto parts manufacturers improve operations and transport links to plants and customers across the globe.

The Procurement Pain Point and Insights Offered

A leading auto parts manufacturing firm wanted to build a new warehouse space as they lacked sufficient warehouse space for operations. The new warehouse would help the auto parts manufacturing firm accommodate parts from other neighboring plants and supply them to their customers across the globe. They also wanted to set up a new warehouse space near their manufacturing facility, which could house parts from regional plants.request free proposal

To cater to the specific category requirements of the client, the supply chain management specialists at SpendEdge followed an in-depth two-step research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection procedures to address the client’s issue. During the course of this supply chain management study, the client was able to choose a site with appropriate transport links and build a distribution center with a bigger storage capacity. Additionally, the supply chain management study helped the client improve their inbound, outbound, customs clearance processes.

Furthermore, SpendEdge’s supply chain management team also provided the auto parts manufacturing client with value-added services at the site, which included labeling and printing.

Key questions answered in this supply chain management study include

supply chain management

Business Outcome

The supply chain management study helped the auto parts manufacturing client serve more customers across the globe with the help of a sufficiently equipped warehouse. Additionally, better transport links to plants and customers provided by SpendEdge helped them improve inbound, outbound and customs clearance certification processes. This resulted in the successful shipment of a higher number of auto parts annually.

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Competitive Pricing Study for a New Automotive Supplier Helps Assess Factors Influencing the Pricing Landscape

Category Overview

The global automotive industry has undergone tremendous transformation in recent years. This market is also expected to witness significant growth in the coming years as it offers a huge growth potential due to higher economic growth in large emerging markets like China and India. However, the major reason behind the sluggish growth of this industry is the implementation of highly specific regulations. Furthermore, it has also been noted that some of the major emerging markets are loosely connected to global trade flows and require dedicated strategies and investments. As a result of such challenges, many automotive firms across the globe have started opting for competitive pricing studies to identify new automotive parts suppliers and understand how to procure materials from them in an effective manner.

The Procurement Pain Point and Insights Offered

A large automotive firm wanted to gain insights on the value chain cost analysis and gain a better understanding of the cost structures of the competitors’ products, the performance attributes OEMs would be willing to pay for, and the basis on how OEMs decide to switch to a new supplier. Additionally, they also wanted recommendations on a tool that would help them develop pricing strategies in the coming years.SE_Demo2

The competitive pricing analysts at SpendEdge carried out a comprehensive two step research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies to cater to the specific category requirements of the client. During the course this study, the client was given insights on where in the value chain could they capitalize on the benefits of its product offering with the help of the model cost structures. The client was also offered a fact base for value-per-attribute, which exhibited the price and performance impact.

Key questions answered in this competitive pricing study include

competitive pricing

Business Outcome

The competitive pricing analysis study helped the client understand the factors influencing the pricing landscape and the selection of parts suppliers by the OEMs. Additionally, through SpendEdge’s competitive pricing study, they also received a flexible pricing tool to model specific pricing scenarios using competitive technology costs, market conditions, and customers’ business case requirements. Furthermore, the client was able to evaluate the pricing strategies under changing market conditions with the help of a flexible modeling tool and a list of options for pricing strategies.

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Supply Chain Risk Assessment – Assessing Supply Chain Risks for Automobile Industry in South America

SpendEdge’s supply chain risk assessment study on the automotive industry in South America company identifies supply chain structures, risks associated with demand and supply, product profitability, and supplier related risks.

Market Landscape of Automotive Industry

Car ownership in South Americas has remained relatively low due to low disposable income, political instability, and travel restrictions. However, the region shows a great potential as the income levels are relatively higher than their Asia-Pacific counterparts and vehicle demand being on the rise. In spite of its economic downturn, major markets like Brazil, Argentina, Columbia, and Peru are posting impressive year-on-year growth in the automotive industry. The majority of the demand for automobiles comes from the passenger car segment, with Brazil being the largest producer.

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Feature Rich Cars Hitting the Road

Automotive manufacturers are adding on to the automobile features in terms of efficient powertrains and safety features. Advanced vehicle features regarding comfort, versatility, and utility are urging the customers to consider new models. The South American market is already introducing so-called connected cars with a fully digitized WiFi and advanced infotainment systems. These cars can exchange vehicle-related information such as safety data, location services, and traffic conditions which can facilitate vehicle diagnosis and repair.

Solutions SpendEdge offer to businesses

SpendEdge’s supply chain risk assessment study for a leading automotive company in South America provides insights into the real-time risks, supply chain risk assessment, price fluctuations, and impact analysis. The solutions offered includes:

  • Deliver impact analysis solutions in identifying and prioritizing the business processes and in case of a disruption
  • Provides best practices for financial risk assessment for qualification of automotive suppliers
  • Offers detailed market overview for the logistics and supply chain risk-aversion practices in automotive industry
  • Delivers in-depth insights on risk assessment models, supplier risk analysis, and supply chain visibility process

Read our complete case study titled – Supply Chain Risk Management Study on the Automotive Industry in South America

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