Paris Motor Show and European automotive reality

October 17, 2012 - 4 Comments

The 2012 Paris motor show just closed its doors – and, with more than 1.2 million visitors, was once again the world’s largest automotive gathering. More than 100 new car models were released – from mainstream bread-and-butter vehicles such as Renault’s new “Clio” or VW’s 7th generation “Golf” to high-end sports cars as Jaguar’s “F-Type” or McLaren’s “P1”. BMW presented its first ever van – featured as “Active Sports Tourer” – with front-wheel drive and 3-cylinder hybrid engine. Porsche unveiled a new version of its “Panamera” – essentially a station wagon, which Porsche marketing dubs “SportTurismo”. There were small SUV’s, large SUV’s, cross-overs, parallel hybrids, plug-in hybrids, all-electric vehicles, light-weight innovations and myriads of new electronics-based offerings such as lane-departure warning systems, in-car wifi hotspots, cloud-infotainment solutions.

So the auto industry seems to be truly on fire, its innovation engine hitting on all cylinders. Yet economic reality looks very different.

European auto sales fell 11% in September, representing the biggest annual plunge in almost 2 years. The full year market is projected to come in at a 17-year low.

As a way out, simple cost adjustment will not do it, more drastic restructuring actions are called for. Peugeot-Citroen is in heated debates with labor representatives and politicians regarding the proposed closure of its Aulnay plant near Paris. At the same time, GM considers merging its money losing Opel unit with Peugeot-Citroen. The Renault-Nissan alliance announced to double their annual cost savings within four years. Daimler kicked-off its own global savings program while in parallel expanding its partnership with Renault. And ACEA president and Fiat-Chrysler CEO Sergio Marchionne even proposed a EU-led European-wide industry restructuring.

Are these “industrial” restructuring steps – capacity adjustments, tighter partnerships, mergers – adequate moves to ensure the future of this fascinating industry? Or is there a completely new global industry model required to more systematically weather these economic cycles – now in Europe, previously in the US, maybe next in China/APAC? Please check out our new viewpoint “Electronics-ization in Automotive: Reinventing the Car Industry Model to Boost Profitable Innovation“ in which we propose a model that is inspired by the collaborative approach of the ICT industry. And give us your feedback whether you think this might be a way to ensure future motor shows will produce the same level of excitement and innovation – in Paris and elsewhere.

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  1. Awesome blog thanks for Sharing good is very interesting and point to get similarities of both industries.

    • Hi Kris (?), thx for your comment. I assume you work in the Auto field. Where do you see the greatest challenge to bring Auto & ICT closer together?

  2. Really interesing viewpoint. I had noticed similarities in the two industries, but it was enlightening to read your methodical and well throught out viewpoint. I guess the new industries can still teach the established ones a thing or two, and undoing the old habits and adopting the High Tech approach does look like it will bring the speed of innovation to the auto industry that customers are demanding. Thanks for this thought provoking post!

    • Hi Peter, thanks for the compliments. Indeed our viewpoint seems to have “hit a nerve” as we get a lot of feedback from Auto executives, journalists, government stakeholders etc. They are not always 100% in agreement with our ideas – but that is ok as a) the main point is to trigger thinking and b) it’s certainly not like we have it all figured out. The key is to get a dialogue going between Auto & ICT – as these industries are moving closer together anyway. So thx again for your comments and let the dialogue flow!