【正文】 anticipates $420M charge for bad car loans Ford 96% drop in operating profit in mid July announcements $525M loss at Ford of Europe, US price war Source: Wall Street Journal, Earnings Reports BUSINESS INTELLIGENCE GROUP Automakers Still Poor at Aligning Supply and Demand Profits in the global auto industry are suffering since OEMs cannot align their supply with consumer demand. While consumer demand data is readily available, carmakers follow lagging indicators and the result is ineffective advertising and rebates and inventory overstocks. The current methods that automakers use to satisfy demand are out of alignment. ? In record sales years (such as 2020), profits in the automobile industry averaged a mere % and only three panies—BMW, Honda and Magna International had 5% profit. ? Forecasts often miss actual demand. For example, demand for Daimler‘s PT Cruiser far exceeded supply when it came on the market. Then DCX ramped up capacity to 230K units, making it ordinary and buyers moved on. Right now the factory is discounting the model, further eroding the model‘s image. ? Suppliers are hurt by variation. When an OEM plans incorrectly on a particular platform volume, of about 1015%, the factory has to raise or lower volume suddenly. ? In 2020 sales were the lowest in four years, leaving vehicle inventory at 70 days. Seventy days of inventory can mean $40B in capital sitting on lots. Meanwhile dealers and OEMs spend $3B and $11B, respectively, every year on advertisements. ? The loop from production planning to manufacture to sale and back takes up to 6 months, which is too long to fix overproduction of an unpopular configuration or to inform suppliers of surges in demand. With a lagging market, intense petition and more rapidly shifting consumer tastes, this poor alignment has been more obvious in the industry than ever. ? Automakers are still applying last year39。 IT spending has suffered as a North American manufacturing market constitutes approximately 45% of the total world manufacturing IT spend. BUSINESS INTELLIGENCE GROUP Executive Summary ? Currently in the automotive industry there is less significance placed on the role of IT in supporting business strategies, especially in parison to industries like Financial Services or Healthcare payer industries. This is a large determinant of IT budget. ? In order to understand their nearterm sales volume, option mix and price sensitivity, automakers have to start understanding their customers better through the many signals they see from their consumers‘ interactions. Much of this can be acplished through CRM initiatives. ? While dealer incentives have been used by most of the major automakers, especially in the US, panies leveraging their existing CRM might be able to get more for less. The data gathered from incentive programs flowing back to manufacturers and dealers can allow followup campaigns that bridge the gap between sales and marketing. ? ERP vendors are turning their focus to delivering extended applications in areas of SCM, CRM and PLM to pensate for the loss of revenue from largescale projects. Competitors and Alliances ? Deloitte Consulting has a joint initiative with SAP to support the automotive industry in the deployment of the mySAP Automotive solution on a worldwide basis. As part of this initiative, DC and SAP are developing methods for customerspecific analysis on feasibility, costbenefit, and ROI. ? IBM encourages their engineers to rotate in and out of the field, spending time solving reallife problems while not abandoning their inside research. IBM has created an innovation services group within its research unit dedicated to working on automotive customer problems, making them capable of taking their research and apply it to business issues. ? In the European automotive industry, SAP is currently focusing on cross functional processes, packaging their SCM, PLM and CRM all in one, using different modules, approaching it from the perspective of the business processes that cross these areas. Global Automotive Industry: Business Challenges BUSINESS INTELLIGENCE GROUP Global Automotive Industry is on a Gradual Slide The world‘s automotive industry has been on a gradual downward slide over the past year, accelerated to some degree by the likelihood of a major bankruptcy and further restructuring of the industry. ? Inhibitors include weak (regional) consumer confidence, high unemployment and uncertain global equity markets, all of which have led to lower sales. ? In Europe, the first five months of 2020 saw sales drop by 4% while new registrations for May fell the lowest in five years. The US market is forecast to shrink 4% this year. ? Currently the global automotive industry has too much capacity (roughly 30%) and as sales fall, the problem continues. Much of the overcapacity is due to each individual pany expecting to grow faster than its rivals. And while the 90s showed strong returns, many automakers invested in additional capacity, created risky models, built more factories and entered into emerging markets that had more long term promise than short term. ? For many years the largest truck and car makers have continually sustained losses out of their primary businesses of car sales, often making profits through money made from selling spare parts at inflated prices, through financing businesses or through exchange rates. This structure is increasingly exposed in a downturn, especially when incentives like 0% financing have hampered the financing business. ? Car prices have been falling making already thin margins even more pressured. The global automotive industry is faced with more petition, greater price transparency, rising customer expectations and quality improvements, making the pressure even greater on price. ? In the US, incentives li