Industry leaders expect a European car giant to go bust in 3 years

The Protolabs report ‘The Innovation Race’ explores the challenges and opportunities for Europe’s car makers, and has discovered the industry’s perspective on the unprecedented pace of change currently being seen globally.

The survey interviewed over 300 senior leaders from car makers and major suppliers including BMW, Daimler, JLR, Magneti Marelli, Volkswagen and Williams F1.

Stricter environmental regulation in the coming 12 months was deemed to be the most pressing short-term concern (55%), whilst 52% believe a new entrant will disrupt the market with a revolutionary new kind of vehicle over the next three years.

The survey also highlighted the move to the next industrial revolution, with 71% indicating that they need to adopt Industry 4.0 or digital processes in order to survive.

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“There appears to be a perfect storm developing in the automotive sector, with trade wars, Brexit and the race to electrification creating a time of extreme change for the car brands and supply chain,” explained Bjoern Klaas, Vice President and Managing Director of Protolabs Europe, the world’s fastest digital manufacturer of custom prototypes and low-volume production parts.

“With so many challenges to face, it is imperative that the industry continues to invest in R&D and its collective ability to bring innovation to market quickly. And with this report highlighting the unprecedented change expected within the next three years, it’s almost a case of innovate to survive and then thrive.”

He continued: “Nearly 70% of people said they felt under the most pressure of their entire career to innovate, with two thirds agreeing that without a strong R&D function the business would cease to exist.

“That’s a very powerful message to send out and underlines what we are seeing with our own business, as demand continues to rise for our service that gives companies the capability to develop new parts within 15 days. Speed to market is absolutely crucial in automotive.”

The Protolabs report was completed during July and involved 300 leading automotive professionals from France, Germany, Italy and the UK.

Respondents work across senior management, R&D, engineering design, technology and supply chain management, providing one of the most comprehensive overviews of the sector recently completed.

Innovation was a core theme throughout the survey and it revealed a mixed picture when it comes to how prepared companies are in meeting this agenda.

On a positive note, 69% said they were satisfied they can scale up a new innovation, with three quarters indicating that they are set-up to include customer insight in the early-stage of the design process.

However, almost half of the firms are less confident in discontinuing an unsuccessful product without suffering a negative impact, whilst 40% feel their innovation strategy is not as aligned as it should be with the corporate vision.

Mr Klaas concluded: “There’s a real willingness to innovate, that’s clear to see. The issue now is that there are so many changes taking place in the automotive sector that even the biggest names are struggling to keep up or are confident they have all the answers.

“That’s where outsourcing non-core competences or tapping into external expertise can be so crucial to gaining that competitive advantage, none more so than in the increasingly digital world manufacturing finds itself in.”

Proto Labs www.protolabs.co.uk