Articles 1-6 of 6
UK, London - 04 May 2010
Arthur D. Little: Electro-mobility players must do more to develop business models
Green market challenge goes beyond developing new technology
In the current automotive crisis, everyone is plugging into electro-mobility. Many OEMs are investing in e-technology development and governments across the globe are rolling out subsidy plans. However, little focus is placed upon developing adequate business models. According to “Winning on the E-mobility Playing Field”, the latest Automotive Viewpoint from global management consultancy Arthur D. Little, OEMs, utilities, infrastructure, leasing companies and service providers will all be competing for consumers’ mobility budgets and must identify the right business model to fully capitalize on the green market.
UK, London - 16 July 2009
Arthur D. Little: Car dealers face further agony with the global financial crisis
Latest report reveals how to evaluate and mitigate dealers’ risk of bankruptcy
As credit markets tighten and the financial crisis deepens, car dealers worldwide are struggling with diminishing profitability and weak 2009 sales. “Dealer Risk Assessment and Contingency Plan Development” – a new report released by global management consultancy Arthur D. Little (ADL) – explores how manufacturers can mitigate dealers’ risk of bankruptcy in order to minimize the impact on sales.
UK, London - 23 June 2009
The global truck and bus industry will experience market and technology challenges after today’s financial crisis
Latest report from ADL predicts that mastering new powertrain technologies will be critical within the rapidly evolving commercial vehicle market
The impact of the global financial crisis on the truck and bus industry has been profound. However, other forces such as increasing divergence in market requirements and new powertrain technologies are driving major changes in the commercial vehicle (CV) industry, which are fundamentally changing the way OEMs, dealers and suppliers conduct business. ‘Powertrain at the Crossroads,’ a new study released today by global management consultancy Arthur D. Little, provides insight into how new technology and market diversification will dramatically reshape the industrial structure of those countries heavily dependent on the CV industry.
UK, London - 29 April 2009
Arthur D. Little: Study on the “Future of Mobility in 2020”
The automotive industry is experiencing an unprecedented crisis. The entire industry is in a state of paralysis, disagreeing on whether the crisis has bottomed out or if the market will continue to deteriorate. Due to widespread restructuring measures, cost structures will be optimised in the short- and medium-term. However, the question remains whether long-term competitiveness can be secured and the automotive market can return to its pre-crisis condition. A new study by Arthur D. Little addresses the changing mobility demands of the future and the resulting impacts on the automotive industry.
So far, the automotive industry is predicting a complete recovery of the market after the crisis has been overcome. While the industry has made downwards corrections to their projected sales figures for 2009 by a solid 8 million vehicles compared to forecasts from October 2008, this calculation is based on the assumption that the financial crisis will have been resolved in 2010 and the industry can return to its old growth rates. The main driver will be demand in the BRIC countries and increasing market penetration of hybrid and electric power systems.
According to Marc Winterhoff, Director and Head of Arthur D. Little’s German Automotive & Manufacturing Practice, “We think this scenario is based on a false assumption, because the financial crisis is an amplifier, but not the cause, of the massive sales slump. The fundamental change in customer demand has its origins in the steadily rising oil prices right up to the outbreak of the crisis and in the debate over CO2. These are both sufficiently well-known and globally acting megatrends which, until that point were given only scant attention by the automotive industry.” These factors have now irreversibly changed customer behaviour in “the blink of an eye, in terms of automotive history”. This has led to significant overall market weakness and significant segment shifts from large, luxury vehicles to smaller, fuel-efficient vehicles. Even the current historically low oil prices have not brought relief.
UK, London - 03 February 2009
Dealerships are key to an auto industry turnaround, states new report from Arthur D. Little
New study warns OEMs that without brand experience at the dealership level, manufacturers risk losing market share to more brand-savvy competitors
A new report released today by management consultancy Arthur D. Little warns OEMs that they must do more to achieve customer brand loyalty at the retail level, and predicts that dealerships will be the cornerstone of automotive brand building in the future. With 2008 new car sales having reached record lows in most developed markets, global automotive companies are under more pressure than ever to avoid collapse. Nearly 80% of all car purchases are still done face-to-face, Arthur D. Little’s “Delivering the Brand,” warns that as the industry faces a growing number of new competitive pressures, global automotive brands must develop dealership management initiatives to ensure their retail networks are building and reinforcing brand loyalty from the test drive through to after sales service.
UK, London - 11 December 2008
The BRIC Battle – Winning the Global Race for the Emerging Middle Segment
A new study by Arthur D. Little identifies what major growth in the four largest emerging economies will mean for mature market multinationals
With global policy makers and business leaders predicting the emerging BRIC markets will remain the key source for growth in the crisis, a new study by Arthur D. Little explains that mature market multinationals must re-evaluate their outmoded globalization philosophies or risk losing out to a new generation of ambitious, fast growing emerging market companies. The report, “The BRIC Battle - Winning the Global Race for the Emerging Middle Segment,” explores how to capture a significant share of the largest customer segment in these countries.
“Just a few days ago private equity house Actis announced it has raised £2.9bn for investment specifically in the BRIC emerging markets – proof positive that as the developed economies face recession in a post-credit crunch environment, emerging markets will continue to grow, albeit at a slower pace” reflects Kurt Baes, a co-author of the report and principal of Arthur D. Little’s Shanghai office. “Multinationals find themselves at a tipping point – they must either begin to re-engineer their engagement with the BRIC markets now, or risk being left behind.”
Growing middle segment
According to Arthur D. Little’s latest report, over the next 20 years Brazil, Russia, India, and China – the so-called BRIC – will account for 50% of global incremental GDP growth. Based upon project experience and interviews with hundreds of leading companies in the US, Europe and Asia, the report’s authors found that mature market multinational companies (MNCs) currently operating in BRIC markets tend only to target the premium segment – leaving local competitors free to serve the lower and emerging middle market segments. The BRIC “middle segment” consist of those products with good basic functionality but without the ‘bells and whistles’ of excess packaging, branding, and differentiating features to which many mature market consumers and companies have become accustomed. As the emerging markets’ middle classes grow, so are the local companies that serve them. Hence the imperative for MNCs to address this market segment now.
"Unless the MNCs begin targeting the growing middle segment in the BRIC economies, they will not exploit the huge growth potential and risk losing ground to increasingly sophisticated local players, who are now taking the success gained in their home markets and translating that into rapidly expanding global offerings,” added Wilhelm Lerner, co-author of the report and Head of Arthur D. Little’s Central European Strategy & Organisation Practice. “As the economy enters a period of global recession where we are seeing developed nations hit the hardest, multinational brands must re-think their emerging market strategies and develop the product offerings and market knowledge to capture a larger share of the growing BRIC middle segment. That is their only chance to remain successful in the long term.”
Entering with caution
Western white goods giant Whirlpool, home furnishings retailer Ikea, detergent brand Unilever, fast food chain KFC, and car manufacturer Toyota are all developed market companies that have made an early and definitive decision to target the BRIC middle segment. The report outlines how each company faced significant cultural, technical, and geographic challenges in successfully capturing these markets’ middle segments, and offers businesses a new strategy for entering the emerging markets: BRIC 2.0.
Arthur D. Little’s BRIC 2.0 strategy is based on a double-rationale for why mature market companies must act now to drive growth in the emerging markets’ middle segments: to exploit the immense local growth opportunity and to protect their position in their home market. To achieve this, the report offers three ingredients to consider in developing a BRIC market entry strategy: