March 05, 2018

Expert talk: Three main drivers pushing the automotive world into a transformation


DI Hanno Miorini, MBA, Vice President Original Equipment Sales, Robert Bosch AG

Three main drivers, electrification of the powertrain, automated driving and connectivity are currently pushing the automotive world into a transformation, with an unknown outcome. The challenges are huge and the stakes are high. I never experienced a time when so many strong drivers of change were acting at the same time. Managers need to be prepared to shape the transition for the benefit of their companies and society, including the contractual chances and risks that go with it.

Electrification:
Thankfully, we are taking now the first steps towards sustainable mobility with new propulsion systems coming up for example electrified powertrains, fuel cell technologies or synthetic fuels. The energy source availability and sustainability is most important and the complete energy cycle from generation to final consumption always needs to be taken into account. Very likely we will see many different solutions for powertrain emerging including traditional optimized propulsion systems.

Automated driving:
Certainly, any reduction of accident casualties in traffic is something we have to adopt as a key target. The step-by step automation of driving supports this goal. Initial levels are already on the road, how fast a fully automated car will be available remains to be seen. The hurdles are enormous and the true benefits are doubted by some. Technology and abundant financial resources however are pushing in that direction. It seems that we need improved driver assistance to balance the influence of the third driver, the omnipresent connectivity. In the end the customer will decide.

Connectivity:
Distraction is becoming one of the major causes for accidents. The internet gets into the car, but also the car gets into the internet. It will be just one of the sensors of an overarching mobility system, which will be very important in order to manage the upcoming growth of our urban areas. Connectivity will enable advanced automated driving systems increasing mobility safety. Also new services are being developed using the increasing car connectivity.

Also, the relationship of players within the automotive industry is changing rapidly. New companies entering the competitive arena, independent mobility providers take their share of the market and the supply chain is becoming a supply net with complex relationships among the players. New business models including new contract categories need to be developed. In addition, strict compliance to regulations in any activity is increasing further in its importance.

The volatility of the transforming automotive market and its chances and risks make it even more important for managers to establish a good understanding of the contractual obligations in the industry while finding the way to profitable business at the same time.

Therefore, I am honored to teach a module of the Professional MBA Automotive Industry Program (AMBA) called “Contracts in the Automotive Industry Key Issues in OEM/Supplier Relations” with the goal to better understand the challenges in the industry and its contracts and how to achieve a balanced outcome in the actual business world. Real world examples prepare the students to face the challenges specifically coming up with the ongoing transition of the automotive business.

The key value of the AMBA Program in my opinion lies in its focus on the very competitive and complex automotive industry providing specific guidance for the students in this field.


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