The most pressing challenges in the automotive industry today may be the search for profitable growth and the ability to expand into the booming vehicle markets across Asia–all while contending with an environment that is both volatile and uncertain. Doing this well requires a carefully defined product and brand strategy, a lean and efficient supply chain, a high-performing organization with the right mix of local and international talent and a tightly planned and executed implementation process.
To help our clients address these challenges, we can provide them with unique insights and expertise related to market entry and network expansion, the success factors required for productive joint ventures and manufacturing expertise. In addition, we have on-the-ground experts who understand the local automotive markets. Our product development excellence program and supply-chain analysis can provide breakthroughs in efficiency and cost management, no matter the length or complexity of the supply chain. We also help OEMs design, develop, and produce vehicles, working side-by-side with development teams to arrive at a cost point that meets both budgetary and performance targets.
McKinsey’s global reach is a distinctive asset, our experts offer unequaled customer and regulatory insights into local markets. When this local perspective is combined with deep expertise in mechanical engineering, electronics, chemistry, and related fields, we can deliver unique and lasting impact for automotive OEMs.
Recent examples of our work
- We helped an automotive OEM rein in an increase in unique parts driven by vehicle-platform complexity. Following an analysis of the company’s product line, we developed a common bill-of-materials process through modularized assembly and flexible automation, which led to a 50 percent increase in utilization of the new platform.
- A gas-turbine manufacturer struggled with long lead times and low margins on new products until we helped restructure its product-development process, putting a focus on concurrent product development and lean techniques, resulting in a 33 percent reduction in time-to-market, a 28 percent reduction in product and process development costs, and a substantial improvement in product quality.
- We helped a heavy-truck company create an organization-wide turnaround program, covering all cost and revenue components. One goal was to reduce the logistics-spending cost base, and via detailed analysis, we identified $130 million in cost-reduction opportunities.
- Working with an Asian OEM, we developed a 5-year sourcing plan that resulted in 20- to 30 percent savings across a number of categories while building sourcing capabilities within the client organization to carry the work forward.