U.S. Automotive Executives Seen Skeptical About the Industry's Economic Recovery

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New York — May 4, 2011 —

Booz & Company

Widespread Skepticism

Scott Corwin

Growth Seen Ahead

China and Other Challenges

Suppliers Optimistic about Prospects

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Brian Collie

Implications for the Auto Industry

  • Focus even more intensely on building attractive vehicles and rebuilding brands. Give American car buyers reasons to "fall in love" again, and to reconnect with heritage brands that hark back to simpler times.
  • Create vehicles with exciting design and styling, superior quality, reliability and durability, and technological innovation.
  • Don't rely on a few blockbuster products. Create portfolios and development systems that produce a positive return on investment for all vehicles.
  • Continue lowering material and structural costs, while bringing new technology to market cost effectively.
  • Prepare for a more globally competitive landscape that will include competitors who are early adopters of advanced technologies and have better cost structures and greater experience in emerging market segments.

  • Better manage their portfolios, focusing on the markets where they have the greatest capabilities and opportunity to create a sustained competitive advantage.
  • Continue to aggressively manage costs. Where possible, suppliers and OEMs should promote collaborative cost-based agreements that give automakers full transparency into relevant supplier operations and in return, allow suppliers to earn a fair return on investment.
  • As industry consolidation intensifies, proactively assess the industry structure for each core business and reconsider their role moving forward: are they a buyer or a seller?
  • Accelerate efforts to find greater leverage with their high-quality product lines through innovating wisely and focusing on areas that create consumer demand.