The world’s carmakers and suppliers have made their intentions clear: The introduction of new competitors in electric cars, the Internet of Things and an increasing distaste for aging technologies means companies have to re-evaluate what they do, and what they want to do in the future. Some companies, Italy’s Fiat and American supplier Delphi for example, have been specific about their plans, with investors revving at the prospects of profitable spin-offs and restructurings. Germany’s automotive industry, however, isn’t so forthcoming.
The supervisory board of Stuttgart’s Daimler, for instance, is currently preparing a “feasibility study” that will mull restructuring into a parent company that oversees Daimler’s activities, which stretch from tiny, two-seater Smarts to giant, over-the-road Freightliners. External consultants will spend a year considering whether the new structure makes sense. The management board has attempted to allay employee fears of sales, saying there are “no plans to split off any parts of the company,” and that the aim is not to “cut costs or staff.” But officially, Daimler has not commented on the issue.
“Companies need to become faster and more agile, and to do that they have to get rid of ballast,” said automotive expert Stefan Bratzel, head of the Center of Automotive Management, a research institution based in Germany. “The old automotive world, with its different areas of business that have evolved over time, is a heavy backpack”. The automotive industry is undergoing massive structural changes, with operations being hived off and sold. Diesel’s days are numbered and a phase of global consolidation is beginning. Investors now consider a company’s ability to transform more important than the old measures of success, such as margins and number of units sold.