Although Covid-19, Brexit and international trade shifts have presented mammoth challenges for all industries in the past year, the Automotive sector has, in particular, seen significant disruption and losses. The Automotive Manufacturing sector suffered EU-wide production losses in Q1&2 2020 alone, amounting to 3.6 million vehicles worth around €100 billion.
Here Templeton & Partners provide the latest global and European market overview into the Automotive manufacturing industry, including:
- Industry Outlook for 2021 and beyond
- Electric Vehicles market
- AV & Connected Vehicles market
- Digital Transformation in the industry
- IT Skills Shortages and skill sets needed to drive the industry’s transformation.
The most recent research and projections from leading publications and institutions such as the European Automobile Manufacturers Association, SMMT, Bloomberg and McKinsey reveal expert insights into the coming years ahead.
Download our free Automotive Market Outlook Report for 2021.
Automotive Market Outlook 2021
- Shortening of Supply/Value Chains – 73% of supply chain executives encountered problems in their supplier base during Covid-19, and 75% production and distribution problems. Covid-19 exposed the vulnerability of extended and complex value chains, particularly in East Asia Pacific, which prompted many to shorten or diversify through reliance on alternative partners and nearshoring strategic value chains. Shorter supply chains may benefit countries with capable manufacturing sectors to temporarily part-substitute China. (McKinsey)
- Logistics Market Growth – By 2030, the logistics market is set to be worth around US$ 75 billion, a monumental increase from US$ 32 billion in 2019. (LogisticsIQ Next-Gen Supply Chain Market Global Forecast to 2030)
- European Passenger Car Market – The EU passenger car market contracted by 23.7% to 9.9 million units as a direct result of national lockdowns and pandemic effects. In December 2020, demand for new passenger cars in the European Union declined by 3.3% to 1,031,070 units. However, the EU’s four largest markets recorded contrasting results: Italy and France suffered significant losses, whereas Spain saw stable results and Germany posted a 9.9% gain. (European Union)
- Automotive Market Sales – The top 11 global markets sold 7.71 million fewer cars in 2020 than in 2019, creating an unprecedented 12.6% year-on-year drop. (AutoCar)
- Semiconductor Shortage – Semiconductor chips are now in short supply, causing disruptions to the global car industry. Since the Covid-19 pandemic forced factory closures and reduced car sales projections and results, many chip manufacturers aligned their strategies to reduce chip production for automotive manufacturers. A new surge in demand driven by other effects from the pandemic and changing consumer habits post-lockdown means the chip shortage is reaching a crisis point. (The Guardian) Volkswagen, General Motors and many carmakers were forced to curtail production because of the shortages. Renault anticipates that it could make 100,000 fewer vehicles in 2021. (Investors Chronicle)
- Car Sales Growth Projected in Europe – After the pandemic saw the sharpest recorded drop in EU car sales, 2021 is forecast to start the path to recovery, with sales rising by 10%. The effects of Covid-19 are expected to persist into Q1 2021, but the market should pick up in the second half of 2021 as vaccination programmes progress. The EU’s economic recovery and increased local demand will drive the new growth. (European Automobile Manufacturers Association)
- Automation Growth in Automotive – Autonomous driving (AD), connected vehicles, electrification of the powertrain, and shared mobility (ACES) are mutually reinforcing developments in the automotive industry. AI will drive a 7% (CAGR) in the automotive software (SW) and electrical and electronic components (E/E) market (from $ 238 billion to $469 billion) by 2030. At this rate, the SW and E/E market is expected to vastly outpace growth in the overall Automotive market, which is estimated to grow at 3% CAGR in the same time span. Most Automotive companies are focusing on software and EE for innovation and new product development, meaning hot competition in the coming years. (McKinsey)
- Collaboration – 73% of Automotive executives rate collaboration as the best opportunity for industry growth. 75% of executives expect non-traditional industry participants to have a key role in the Automotive ecosystem by 2025. (IBM)
Download our free Market Intelligence Report to discover:
- Electric Vehicles Leaders – Which major industry players are leading the way with EV innovations
- Market Trends – From sustainability and innovative efficiencies to road safety, consumer involvement and shared mobility
- Market Leader Activity – Where and how the largest Automakers around the world are investing and ramping up growth plans for 2021 and beyond
- Digital Transformation – How automation, IoT and digitisation will impact Automotive manufacturing globally in the next five years.
