Automotive

Automotive

Tom Linebarger, Chairman and Chief Executive Officer, Cummins Inc.
James R. Verrier, President and Chief Executive Officer, BorgWarner Inc.
Roger Wood, President and Chief Executive Officer, Dana Holding Corporation
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Automotive CEOs are more optimistic this year, despite concerns about a wide range of threats. They see a need to respond to global trends, but many are just getting started – and only a minority think key departments are well-prepared.

CEOs are more optimistic about the economy
This year 44% of automotive CEOs believe the global economy will improve over the next 12 months and just 7% expect it to decline. That’s a U-turn from last year’s sentiment when just 16% of automotive CEOs expected the economy to improve and 32% believed it would decline.

although they see other threats looming.
Automotive CEOs are more concerned than their peers about a whole host of threats, from exchange rate volatility to high or volatile energy costs and raw materials prices, from shifts in consumer spending and behaviours to inadequate basic infrastructure and supply chain disruption. Political and economic threats are looming too; 78% of sector CEOs worry about an increasing tax burden, compared with 70% of CEOs overall. Around three-quarters of automotive CEOs say they are concerned about government responses to fiscal deficit and debt burdens too.

CEOs think they can cope – but aren’t so sure about the competition
Most automotive CEOs are optimistic about their own company’s ability to cope; 34% are very confident of revenue growth over the next 12 months, and that figure jumps to 47% looking forward three years. But they’re notably more pessimistic about the prospects for the industry, with just 7% saying they’re very confident of the sector’s growth prospects over the next 12 months, and only a few more – 16% -- very confident looking out over three years.

Automotive companies have been re-trenching.
In the past 12 months, 86% of automotive CEOs say their company has implemented cost reduction measures, more than across the overall sample. And fewer report M&A activity or outsourcing. That holds true for the coming 12 months as well.

But a transforming world will mean ramping up efforts to change..
Automotive CEOs see a need to change most aspects of their business to respond to transformative global trends, but customer growth and retention strategies, talent strategies and use and management of data and data analytics stand out, with nine out of ten CEOs acknowledging a need to change. In all of these areas, many are just getting started. For example, only around a quarter already have programmes underway or completed to adapt both talent strategies and companies‘ approach to data.

..so companies will need to get ready fast.
Fewer than four in ten automotive CEOs believe that their customer service, HR, and IT departments are well-prepared to make the needed changes. Just 44% of CEOs feel their sales department is well-prepared to make changes, and 39% see customer service as well-prepared.

44%of automotive CEOs expect the global economy to improve in the next 12 months

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86%of automotive CEOs say they cut costs this year

 

Automotive CEOs are concerned about a wide range of potential business threats

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CEO interview quotes

"At Michelin, there is a strong corporate culture around innovation that simply needs to be emphasized. Research is substantial across all areas: materials, product architecture, the products themselves, etc. We invest heavily in our research centers, as we are more than confident in our ability to innovate. We have faith in this area.”

Jean-
Dominique Senard

Chief Executive Officer, Michelin Group

"We’ve focused our entire company strategy around profitable growth for the last five or ten years.”

Tom Linebarger
Chairman and Chief Executive Officer, Cummins Inc.

"We operate all over the world in just about every region where our customers are… We’re also fueling technology innovation, meeting customer needs for fuel economy, fuel efficiency, and total cost of ownership—the megatrends that are out there… It’s certainly our target to be above market growth in every region that we operate in.”

Roger Wood
President and Chief Executive Officer, Dana Holding Corporation

"Poland and Portugal are examples of locations where we get great talent—not just manufacturing and operational talent, but also engineering talent. Both of those facilities are close to well-regarded universities, a great source of technical talent to bring into BorgWarner.”

James R. Verrier
President and Chief Executive Officer, BorgWarner Inc.

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