BCG's expert Jonathan Van Wyck and John Deere’s Matt Percy discuss how solutions as a service is revolutionizing agriculture.
Our Approach to Automotive Strategy
The automotive industry is shifting rapidly, propelled by new ideas and possibilities. BCG helps companies turn inspiration into innovation, creating the vision that takes them—and the industry—even further, while building the resilience to respond quickly to challenges and uncertainty, such as volatile supply chains. We partner with clients to create a next-generation automotive strategy that accelerates the journey to sustainable mobility and electrifies the future, as well as the cars themselves. And we empower them to seize new opportunities long after we’ve left the scene.
Collaboration and enablement are at the heart of our automotive consulting work. So is our holistic approach. With more than 1,100 experts around the globe and across the value chain, we help companies both new and old develop connected and autonomous vehicles, pursue new businesses, and launch large-scale automotive digital transformation projects. Five key themes stand out:
The Transition to Electric Vehicles
The automotive industry contributes 12% of global emissions. If companies are to drive growth as well as sustainability, they’ll need a carefully tailored approach. For example, we help original equipment manufacturers (OEMs) excel in their existing businesses while developing the innovations and operating models that will propel the transition to electric vehicles. We partner with new entrants to drive scale and differentiate in the ways that matter most. We work with suppliers to refocus their portfolios as revenues from traditional components plateau. And we help all clients leverage key enablers such as data and AI through automotive digital transformation.
Software-Defined Vehicles
Automobiles have essentially become tech products on wheels. The impact of self-driving cars and connected and autonomous vehicles is bringing big opportunities—but also big questions. We help clients spark new revenue streams in areas such as subscription-based services, develop best-of-breed experiences through human-centered design, identify and attract talent, and know when to buy, build, or outsource the capabilities driving the future of the automotive industry. In an era when new features are delivered anytime, anywhere through software updates, we help companies innovate at the pace of a digital native.
The Power of AI
Data is a key element of automotive strategy. It fuels the analytics and AI that help companies operate more efficiently, optimize their product portfolios and supply chains, and better serve customers. To help companies turn data into value, we tap the expertise—and specialized tools—of
BCG X, our tech build and design unit. Working together, we take full advantage of new enablers, chief among them being GenAI, which opens the door to hyper-personalized experiences and more effective marketing and sales—and also drives cost reduction in the automotive industry.
Supply Chain Resilience
Chip shortages, inflation, geopolitical crises, the transition to electric vehicles: now more than ever, the automotive industry needs to respond to change quickly and precisely. By helping companies build resilience, we ensure that disruption doesn’t disrupt business. Our automotive consulting team takes a proactive approach, working with clients to identify sources of risk, reduce waste to free up resources, leverage AI to anticipate roadblocks and manage supply chains, and develop an agile workforce. To make it all work, we imbue the effort with robust change management and best-of-breed digital tools.
Business Model Innovation
The new cornerstones of the automobile business—connected and autonomous vehicles, the transition to electric vehicles, and a drive for sustainability in the automotive industry—are sparking new business models. We work with new entrants to develop the strategies and technical capabilities to operate at scale and realize their potential. At the same time, we help more established companies take inspiration from the new players to self-disrupt, whether through innovative sales models, digital growth, or other paths that drive business value. In all cases, we guide clients in adopting and prioritizing new ways of working.
Our Clients’ Success in the Automotive Industry
We work with OEMs, suppliers, retailers, and other players across the automotive value chain to shape the journey to sustainable mobility. Our automotive consulting services have been integral in launching new vehicle manufacturers, transforming established players, and guiding some of the industry’s most successful mergers and automotive digital transformation projects. Here are some examples.
Through a large-scale cost transformation, we enabled a European premium vehicle manufacturer to realize more than $7 billion in cash and earnings before interest and taxes (EBIT) improvement, helping navigate tough market conditions and helping fund the internal combustions engine (ICE) to battery-electric vehicle (BEV) journey. We also helped strengthen their supply chain and lowered material cost, including for the new BEV platforms.
We worked with a global vehicle manufacturer to optimize their partner network for their next generation of software-defined vehicles. We enabled quicker and broader access to cutting-edge technology and optimized the deployment of more than 10,000 engineers and more than €2 billion annual R&D spend.
We helped a leading off-highway vehicle manufacturer revamp its supply chain and improve its engineering efficiency by supporting initiatives that will deliver approximately $250 million in annual EBIT opportunity. Within engineering, our team also outlined ways to reduce costs by 10% and improve speed to market by up to 35%.
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BCG’s Automotive Industry Tools and Solutions
To help clients unleash the power of AI, we bring a unique set of enablers, powered by
BCG X. These proprietary tools and solutions let automotive industry players uncover new sources of value. They also help us accelerate key initiatives, including automotive strategy, supply chain optimization, and cost reduction in the automotive industry.
Auto AI by BCG X
Many AI projects in the automotive industry never progress beyond proof of concept. BCG X’s advanced AI and analytics solution leverages business and technology expertise to help clients achieve end-to-end implementations that change the course of the industry, disrupting operations, sales, marketing, and more.
Auto AI by BCG X
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Manufacturing AI by BCG X
OEMs throughout the automotive industry are under intense pressure to do more with less and streamline the entire manufacturing process. Our integrated AI-powered manufacturing offering brings together BCG’s operations know-how and BCG X’s advanced analytics capabilities to unlock value at scale on the shop floor.
Manufacturing AI by BCG X
Our Latest Insights on the Automotive Industry
Article
January 8, 2025
The way consumers buy automobiles has changed radically since the Mad Men era, but not automakers’ marketing. This shift calls for a faster, data-driven approach.
Article
January 7, 2025
Beyond technical implementation, success hinges on design choices that promote adoption, thoughtful process reengineering, and an unwavering focus on savings targets.
