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Absorbing disruptions

Automotive’s strategic plan to tackle a new world

5-minute read

In brief

Automotive companies are facing increased volatility and disruption that is changing their strategic approach. The winners will be those able to adapt and thrive by harnessing technology to drive constant renewal—transforming their supply chain, manufacturing and sales. This report sets out the 10 steps that all automotive businesses can take to differentiate, innovate and grow.

All change for automakers

As the economic and geopolitical certainties of the last few decades have given way to volatility and disruption across multiple fronts, the premises underpinning automotive original equipment manufacturers’ (OEMs) strategies are changing dramatically, too. This is not a short-term adjustment. The developments reshaping the world will remain for years to come. And all this comes at a time when the industry is already undergoing the biggest transformation in its history—from internal combustion engines to electric vehicles and green business.

To respond effectively, OEMs will have to develop new products, business areas, capabilities and structures—across the supply chain and beyond. They’ll need to revisit and reinvent long-established strategies for supply, manufacturing and sales.

Absorbing Disruptions Chart
Absorbing Disruptions Chart

Rebuilding supply for a disrupted world

While global supply chains have created significant cost savings, they have proven to be acutely vulnerable to disruption such as those caused by the pandemic and the war in Ukraine. As a result of these and similar disruptions, 76% of North American automotive executives now say that availability and speed are more important than cost, and they are de-risking by shifting supply chain strategies to bolster the availability of components and raw materials. However, the decision should not be between cost and availability. By following the key steps below, we believe that automakers can achieve both:


Combine global and local supply, mixing low-cost locations with more local suppliers to ensure flexibility and provide a buffer against unexpected surges in demand.


Control value-added processes by moving away from just-in-time delivery and instead manage inventory to protect against disruption.


Bring more of the critical supply chain in-house by vertically integrating key elements, such as battery production for electric cars.


Deploy digital tools and solutions across the entire supply chain for maximum speed, efficiency and robustness.


Make use of circular approaches, reducing, reusing and recycling raw materials to boost environmental performance and guard against volatility of price and availability.

Maximize flexibility and agility

Globalization not only changed automakers’ supply and manufacturing strategies, it also opened new markets for sales. But in the face of unpredictable global economies, automakers need to reassess their dependence on just a few markets, such as China, and rebalance by strengthening sales and manufacturing in others. To do that, they must develop new levels of flexibility and agility to seize new opportunities. We believe that the following steps can help them do that:


Harness technology to create omnichannel experiences that offer customers a compelling sales journey wherever they are.


Create flexible, automated manufacturing cells to switch the production mix quickly and meet the needs of different markets and fast-changing consumer demands.


Build systems for an uncertain world by regionalizing digital infrastructure that complies with local restrictions on data sharing and use of software.


Empower local leaders by embracing local cultural norms and management styles rather than imposing a centralized model of structures and processes.


Decide on greater flexibility and decentralization using forward-looking data and analytic approaches to better predict future events.

Winning in the new reality

Recent geopolitical and macroeconomic developments represent much more than a short-term economic dip. Global value chains are likely to remain stretched. Competition between nations and larger regions may overtake the idea of a globalized world with companies competing within it. To master this new reality, automakers need to implement Total Enterprise Reinvention. That means taking an integrated, holistic approach, based on technology, with talent building the core. Automotive OEMs who can do that will differentiate themselves, increase their competitive advantage and harness continuous opportunities to grow.


Juergen Reers

Senior Managing Director – Global Industry Sector Lead, Automotive

Stefan Hattula

Senior Principal – Global Automotive Research Lead

Alexander Huber

Managing Director – Strategy and Consulting Lead Mobility

Johann Wieland

Senior Advisor – Automotive and CFO & EV