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SOURCE PwC US
Of the 102 New Factories Planned From 2013 to 2020, 67 Will be Located in Asia
DETROIT, June 5, 2014 /PRNewswire/ -- Of the 102 new factories planned from 2013 to 2020, 67 will be located in Asia, according the PwC's Autofacts. In the latest publication titled, How to be No. 1: Facing future challenges in the automotive industry,' finding the right assembly location is one of the top priorities for automotive companies.
"A key trend in the industry is 'build where you sell,'" said Felix Kuhnert, PwC's European automotive leader. "Automakers continue to have their sights on the Chinese market where sales and assembly are forecasted to grow to approximately 30 million by 2020. Each market has different customer preferences that automakers are producing to meet those local demands. The level of that customization varies in complexity from market to market, impacting production costs."
PwC analysis indicates that an estimated 400 trillion possible variations are offered in a typical German mid-class vehicle model. This is compared to just 1,500 variants offered in a comparable vehicle in the Chinese market.
Planning is critical for automakers. While demand for different models and variants continues to change, automakers need flexible suppliers who are able to deliver the required modules and components reliably and on-time. And the Original Equipment Manufacturers (OEMs) should to be able to install the right parts and produce their own customized versions where necessary. That means flexible assembly lines, ideally those that can produce vehicles across different segments.
In addition, shorter production cycles create other challenges, such as increasing the need to modify production processes. That means it's important to plan ahead for future vehicle generations and work to integrate a high-level of standardization into platforms and vehicle architecture.
"Global platforms are essential to improving profit margins for automakers," noted Rick Hanna, PwC's global automotive leader. "Strategically companies approach global platforms to meet their needs based on R&D, vehicle segment, market, and a number of other factors. Having a plan to fulfill the production model of tomorrow can make the difference in gaining future market share."
As the automotive industry continues to grow to record levels, the industry should consider the challenges ahead, including:
Automotive manufacturers and suppliers are confronted with complexity as a result of increasing numbers of products and options, shorter technology cycles, increasing pressure to innovate and global supply networks. And at the same time they need to balance the needs and demands of customers, investors, regulators, non-governmental organisations (NGOs) and the public.
Competition breeds efficiency, inventiveness, flexibility and decisiveness mandatory. The key to success for the challenges in this fast moving environment are:
To gain insight into the automotive challenge ahead and staying number one in the market, please download the publication 'How to be No. 1: Facing future challenges in the automotive industry.' at www.pwc.com/auto.
About PwC's Automotive Practice
PwC's global automotive practice leverages its extensive experience in the industry to help companies solve complex business challenges with efficiency and quality. One of PwC's global automotive practice's key competitive advantages is Autofacts®, a team of automotive industry specialists dedicated to ongoing analysis of sector trends. Autofacts provides our team of more than 4,800 automotive professionals and our clients with data and analysis to assess implications, make recommendations, and support decisions to compete in the global marketplace.
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