Jens Hörning
Dear Friends and Business Partners,
There is currently lots of focus on the transformation of the automotive industry, and the discussion is about e-mobility, specifically about battery-driven e-mobility. In order to able to comply with, or at least get close to EU CO2 emission rules, car manufacturers need to include battery-driven cars in their fleets. But e-mobility itself will not transform the automotive industry. It is about a change in mobility demands and related innovations, including electric vehicles, and connectivity, autonomous driving and sharing models.
Car manufacturers have invested billions of euros in designing vehicles for connected, autonomous, shared and electric mobility. Development times for these technologies vary, e.g. electric cars are gaining in popularity, while autonomous and shared vehicles are still a bet for the future. However, all these technologies are seen as inevitable.
To avoid being left behind, many carmakers jumped in, hoping to gain an early-mover advantage and become segment leaders, which had a direct impact on the investment needs of their suppliers. So far, many automakers and suppliers have been disappointed: the introduction of e-vehicles is not as strong as original expectations, and as for self-driving cars, some analysts do not want to be reminded of the predictions they made five years ago.
To be sure, the new mobility demands will ultimately reshape the automotive industry, and in order to benefit from this, there needs to be a clear focus on prospects, capabilities and investments, especially at a time of other concerns, such as regulation and protectionism, including threats to supply chains with a direct impact on suppliers. The best approach will vary from one company to the next, each having its own abilities. But all successful approaches will likely involve the same principles: a more specialized portfolio, a more focused value proposition, more rigorous financial management and a greater willingness to collaborate with others, specifically in capital investment and innovation.
The Slovak automotive industry does not stand away from the transformation, and the future success of the sector is key for the whole economy of Slovakia. So far, in 2019, the unemployment rate has further decreased. At the same time, Slovak CEOs are concerned about the economic outlook and a slowdown in growth and are preparing for cost cutting. In addition, CEOs expect that the quality of education is having negative impacts on the introduction of new technologies and Slovakia's competitiveness. There are sure to be many challenges ahead for the supplier industry.
This is the seventh Slovak Automotive Supplier Survey. The results were published in May 2019. Our thanks go to all the representatives of the supplier industry who took part in the survey. Their responses give a comprehensive summary of the expectations and anticipated challenges for the sector in Slovakia. I feel certain you will find the survey interesting reading and a source of added value.
Jens Hörning
PwC | Partner | Audit
PwC CEE Automotive Industry Leader
