The global automotive industry is currently mired in a perplexing contradiction. From the point of view of the customer, this is the industry's Golden Age. Despite nostalgic glances back to grand old cars of the past, vehicles today have never gone faster, handled better, lasted longer, or cost less (in terms of the share of income they demand). 

But from the point of view of the manufacturer and supplier, this seems to be a Dark Age. Profits are under relentless pressure, excess capacity seems permanently in place, and competition dictates that automakers add more and more features to the car, for which the consumer seems stubbornly unwilling to pay. 
 
One explanation for this contradiction is that in most of the main markets around the world there is almost no unit growth beyond population increase. And on the supply side, we have persistent overcapacity.

So, what is to be done? The answer lies in the various successes scored by individual players. While on average our industry has not been generating shareholder value, there are wide variations in returns around the dismal averages. 

Sometimes these winning positions are driven by industry structure. For example, it is generally true that financing cars can be more profitable than making them, and that the aftermarket holds out wider margin opportunities than available within the industry. Other winning positions are driven by corporate strategy. 

For OEMs (Original Equipment Manufacturers), for example, the single most critical strategic choice may be whether to drive for the lowest cost provision of high-quality mass market vehicles, or to push for the highest value attractively branded vehicles, sold into a series of niche market segments. 

For suppliers there are more choices, defined by value propositions that may focus on technological innovation, lowest processing costs, integration of parts and functions into total systems, and highly flexible modular assembly, to name a few. 

Reconciliation of this Dark Age and Golden Age takes place in the marketplace of value. There is much value to be earned in our industry, but because the average participant is losing value, the winners need to beat the averages. If there is only one piece of advice we can give in this regard, it is to focus on what you do best. The global automotive industry no longer has any tolerance for firms that do otherwise.