Transformation of The Auto Industry – Setting The Stage

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A seismic shift is occurring in the global auto industry driven by Six Transformation Axes (disruptions).

120 years ago, there was One Transformation Axis in play:  The horse and buggy moving to the automobile.  The end state was clear but in 1900 they did not know when the auto would dominate or the path the world would take to get there.  By 1920 there were three different autos, powered by:

  1. Electricity
  2. Gasolihe
  3. Steam

120 years later The Auto Industry is going through seismic shifts as six Transformation Axes are in play.

Tony Seba in his book Clean Disruption predicted the Internal Combustion Engine (ICE) would be obsolete by 2030.  He defined “obsolete” as no major auto manufacturer will produce and sell a car powered by an ICE.  His prediction, made in 2014, looks as though it’s right on the money.

Six independent Transformations* are impacting the Auto Industry Today.

*We prefer to use the word Transformation instead of Disruption.  Disruption is overused, misunderstood and infers a negative outcome.

1.  Internal Combustion Engine replaced by the EV drivetrain with Mild Hybrid rise and fall

2.  Driver moving to Driverless (autonomous) Vehicles (AVs)

3.  Car Ownership to Mobility as a Service (MaaS)

4.  Brick and Mortar to Omnichannel Retail

5.  Unconnected to Connected Vehicles

6.  Individual to Fleet Ownership

These Transformation Axes are independent and Auto Manufacturers, Tier 1 and 2 parts suppliers and Auto Dealers have no control over the outcomes.

The better Auto Manufacturers, Tier 1 and 2 Suppliers and Auto Dealers are informed on these Transformations,manage through them, and plan their future, they will assure their continued success and future growth.  Value Innovations and Vision21 have the knowledge, processes, and tools to assure positive outcomes.

Denial that these Transformations are in play is a passport to disaster. The results will not be pretty.

For more information on Transformation Axes, view our 6.5 minute video at http://bit.ly/2yz2bBu

Are Electric Vehicles for real?  Audi, Mercedes-Benz and VW vote “Yes” with investments totaling >$100B

We have talked to a number of key players in the industry who are in denial.  They see Elon Musk and Tesla Motors as nothing more than upstarts.  They full expect Tesla to implode and EVs to disappear.  Could they be wrong?

In September, 2017 three major German auto manufacturers announced their commitment to EVs:

  1.  Volkswagen’s  CEO announced they were going to invest $84B in the development and manufacture of EVs ($60B to be devoted to the development and manufacture of Li-on batteries).  VW expects to introduce and manufacture 300 EV models by 2030.
  2. Mercedes-Benz announced they were going to immediately invest $10B in EV development and manufacturing capacity.
  3. Audi’s CEO shared they were going to cut costs and substantially reduce their R&D investment in new internal combustion engine powered vehicles and invest the savings, $12.5B, in the development of new EVs.  Audi expects to have 12 different EV models in production by 2025.  The first production model will be the e-Tron Quattro SUV.

What is Electrification?

Electrification defines a state where an Auto Manufacturer’s fleet is comprised of 48V Mild Hybrids and EVs.  The 48V Mild Hybrid is an excellent stepping stone to an EV, allowing manufacturers to further their understanding of Li-on battery technology while reducing engine size and cost, improving performance and fuel economy.  Several Tier 1 Suppliers (Delphi, Continental, Valeo) are fully capable of supplying the auto manufacturers with turn-key Mild Hybrid platforms.

Value Innovations and its team members/partners & Vision21 are following the progress of 30 Auto Manufacturers

We are following their progress using social media. Programs are constantly being updated and we update our database so we can keep you informed.

Are Regulations accelerating these Transformations?

Yes.  Perhaps the single most influential body is the California Air Resources Board.  They have determined they will ban the sale of ICEs in CA and are determining which year this ban will go into effect, 2030, 2035 or 2040?  If it’s 2030, that sets the table for the rest of the US.

How can we help you?

We offer:

  1.  1h webinars during the first two weeks of every month.  They are designed to raise your team level of awareness.
  2. Short workshops (2 to 4h) also offered at the beginning of the month.  These put you in a position to determine if you want us to work with your team to tailor solutions for your business.
  3.  Hands on support to your team.  Typically this is at least a 3 month engagement. At the highest level we will work with you to define Your:
  • Purpose
  • Goal Tree
  • Intermediate Objectives
  • Proximate Objectives
  • Strategy & Tactic Tree
  • If, Then Planning

Want to learn more?  Download our Brochure:

 

Download Workshop Brochure

 

View Our 6.5′ Podcast

 

And, if you have questions, contact us at:

Dick Lee, CEO, Value Innovations, Inc. +1-720-291-0758, dick_lee@valueinnovations.net, Denver, CO, USA

Dick Melrose, CEO, Vision21, +1-561-737-8842, r.melrose@Vision21.us, Boynton Beach, FL, USA

Want to up your innovation game? Want to up your organization’s innovation game? Attending one of our Mastering Value Innovation Workshops is a great place to start. In 2016 we are going to change our approach. We will work with you to develop your own custom workshop that addresses your problems and you define the length and location. More information can be found in the Workshop Brochure.