Driverless cars, green fleets, endless power-train advancement and networked vehicles were among the revolutionary megatrends listed by a recent Goldman Sachs study. But, there’s huge ructions happening on the broader level - this blog will delve further into global trends on a macro level. We look at how investment in car manufacturing has grown in developing markets; the rise of the ‘mega-supplier’ and, shared values.
Automotive industry investment is shifting to emerging markets
The economies of developed nations, with their relatively low growth rates in comparison to countries such as China and India, are not the only focus of automotive brands’ investment. In other words, where manufacturing plants for car brands were traditionally situated in developed markets, cars are increasingly being made in emerging markets. For instance, an article by the East Asia Forum explains how the Japanese automotive producers have moved their manufacturing operations to Indonesia because of competitive pricing and a receptive and growing local market. What’s more, economic growth in developing countries in Asia and Africa, is predicted to be on an upward curve until at least 2050. Automotive investment will shift, and indeed has been shifting, in line with this geographical focus.
The automotive industry has seen a rise in the “megasupplier”
As cars are a staple of the global consumer market, global car parts suppliers compete in a tough game. But the 16 major car manufacturers are now being supplied by just 10 major component makers, states the Financial Mail, meaning that many of the same parts are used across car brands. It made sense for a manufacturer to get parts from one platform, heralding a convergence of suppliers and the rise of the “mega-supplier”.
Shared values are a growing trend in business sustainability
The Barloworld Group, of which Avis Fleet is a part of, are leading the pack in the “shared values” revolution. The group’s shared-value positioning came about to increase sustainability and competitiveness as the automotive industry mega trends alter the realities of the global market. The Barloworld Worldwide Code of Conduct (hyperlink to this COC) provides specifically for the vision of sustainability for its employees, its customers and the environment. Mega trends form a crucial nodal structure around which sustainable alternatives are employed to increase efficiency, productivity and competitiveness for Avis and Barloworld, but also for their customers and employees. Large effort is put into their relations with their suppliers in maintaining efficient channels into the market place. The model Avis and Barloworld employ in communication with the local communities, in which they operate, already addresses the global shift towards emerging markets. This is reflected in the creation of industries and consumer markets within emerging markets, where local communities are engaged through the notion of development alongside expansion.