Nov 17, 2020

Deloitte: Road to recovery for automotive post COVID-19

Deloitte
Automotive
Technology
covid-19
Janet Brice
5 min
Automotive
Five-step plan from Deloitte Insights to re-start the global the automotive industry...

Nearly half of US consumers are planning to keep their current vehicle following COVID-19, according to research from Deloitte Insights. But what does this mean for the global automotive industry?

As the pandemic is influencing the way people think about mobility from car ownership to public transport, Deloitte has produced an insightful report, How the pandemic is changing the future of automotive, which calls on stakeholders to join forces and get the global automotive engine running smoothly again.

Deloitte has highlighted five-step-plan manufacturers could follow on their road to recovery. This includes: 

  1. Collaborate with dealer networks
  2. Agile in response
  3. Protect critical investments
  4. Focus on assets
  5. Collaborate on innovation

According to industry forecasters, global new vehicle sales is set to total more than 70 million units in 2020 - a downgrade of 18.5 million light vehicles from January’s estimates. “To put that in context, the drop in global demand this year alone is roughly equivalent to light vehicle sales expectations in the United Kingdom, Japan, and the United States combined,” comments Deloitte.

May auto sales figures were encouraging, but a Deloitte’s study found that nearly half of US consumers (47%) are now planning to keep their current vehicle longer than they originally expected. This level is echoed in other markets including China (65%), South Korea (63%), and Japan (48%). 

“It also represents a challenge for manufacturers looking to kick-start new vehicle sales and casts a shadow over expectations for the shape of the demand curve moving forward. A full demand recovery may take years. 

“An immediate, V-shaped recovery is looking increasingly far-fetched, as various government assistance initiatives start to dissipate in the coming months, leaving consumers to face the full reality of a diminished financial capacity,” said the report.

Deloitte’s five-point recovery plan in detail:

1. Collaborate with dealer networks

Increase collaboration with dealer networks to accelerate the adoption of digital tools designed to create frictionless engagement with customers. 

“Even though the jury may still be out as to whether consumers will migrate en masse to buying cars fully online, there are still many areas where integrated digital tools can have a transformational impact on the vehicle purchase process and overall brand engagement,” comment Deloitte.

“At the same time, manufacturers can accelerate the deployment of digital tools back through the supply chain to maximise transparency and to detect potentially crippling issues early on.”

Establishing digital supply networks and deploying artificial intelligence can enable smarter planning decisions and improve overall agility through a deeper and broader understanding of the system, the report recommends.

2. Agile in response

Maintain the manufacturing discipline gained through the last upcycle, focusing on producing vehicles that consumers want to buy.

“Companies that are trying to restart assembly operations under a pre-pandemic strategy may need to be much more agile in order to respond to shifts in the vehicle mix caused by a growing consumer affordability issue,” says Deloitte.

3. Protect critical investments

Deploy technology transformation tools to identify and prioritise further cost-cutting opportunities while protecting critical investments that can yield significant forward benefits (powertrain electrification and smart factory). 

“Cost cutting in a downturn is certainly not revolutionary but knowing which investments in innovation to protect given longer-term macro trends can be a critical success factor for automotive companies moving forward,” said the report.

4. Focus on assets

Isolate areas of the business that represent a cash drain and make the hard decisions required to rehabilitate, sunset or divest underperforming assets. 

“Continuing to prop up unprofitable assets will be increasingly difficult moving forward, particularly manufacturing operations that struggle to meet a minimum capacity-utilisation threshold.”

5. Collaborate on innovation

Ramp up the exploration of strategic partnerships to maintain a focus on innovation while sharing investments and minimising risk. 

“Traditional notions of competitive exclusivity between original equipment manufacturers (OEMs) may be giving way to the realities of emerging market conditions. Finding ways to collaborate on innovation may become a strategic imperative for automotive companies,” said Deloitte.

How could consumers re-engage with the automotive industry?

Living through various levels of lockdown consumers have ramped their use of digital tools to consume goods and services – which could extend to buying vehicles.

Deloitte’s study suggests that most consumers are not looking to buy their next vehicle online, other than in India (71%) and China (45%). Interest in an online purchase process is limited to one in four consumers or fewer in other markets around the world. 

“The reason for this may be a long-standing acknowledgment that certain aspects of the vehicle sales process, such as the test drive, remain difficult to digitise,” says Deloitte.”

Are consumers changing the way they view mobility?

Deloitte statistics reveal physical distancing means vehicle ownership is becoming valuable to people with 79% of consumers in France, 74% in the United States, 69% in the United Kingdom. 

A total of 56% of people surveyed in the US indicated they are planning to limit their use of public transit over the next three months due to hygiene reasons. A similar sentiment prevails in Italy (63%), Spain (60%), Australia (53%), and Japan (48%). 

Translating this consumer sentiment into sales may prove challenging due to the cost. Deloitte points out that financial institutions will play a pivotal role in determining whether consumers will be able to maintain access to credit and stay in the market.

Read more

For more information on business topics in the United States and Canada, please take a look at the latest edition of Business Chief North America.

Follow Business Chief on LinkedIn and Twitter. 

Share article

Jun 12, 2021

How changing your company's software code can prevent bias

Deltek
diversity
softwarecode
inclusivity
Lisa Roberts, Senior Director ...
3 min
Removing biased terminology from software can help organisations create a more inclusive culture, argues Lisa Roberts, Senior Director of HR at Deltek

Two-third of tech professionals believe organizations aren’t doing enough to address racial inequality. After all, many companies will just hire a DEI consultant, have a few training sessions and call it a day. 

Wanting to take a unique yet impactful approach to DEI, Deltek, the leading global provider of software and solutions for project-based businesses, took a look at  and removed all exclusive terminology in their software code. By removing terms such as ‘master’ and ‘blacklist’ from company coding, Deltek is working to ensure that diversity and inclusion are woven into every aspect of their organization. 

Business Chief North America talks to Lisa Roberts, Senior Director of HR and Leader of Diversity & Inclusion at Deltek to find out more.

Why should businesses today care about removing company bias within their software code?  

We know that words can have a profound impact on people and leave a lasting impression. Many of the words that have been used in a technology environment were created many years ago, and today those words can be harmful to our customers and employees. Businesses should use words that will leave a positive impact and help create a more inclusive culture in their organization

What impact can exclusive terms have on employees? 

Exclusive terms can have a significant impact on employees. It starts with the words we use in our job postings to describe the responsibilities in the position and of course, we also see this in our software code and other areas of the business. Exclusive terminology can be hurtful, and even make employees feel unwelcome. That can impact a person’s desire to join the team, stay at a company, or ultimately decide to leave. All of these critical actions impact the bottom line to the organization.    

Please explain how Deltek has removed bias terminology from its software code

Deltek’s engineering team has removed biased terminology from our products, as well as from our documentation. The terms we focused on first that were easy to identify include blacklist, whitelist, and master/slave relationships in data architecture. We have also made some progress in removing gendered language, such as changing he and she to they in some documentation, as well as heteronormative language. We see this most commonly in pick lists that ask to identify someone as your husband or wife. The work is not done, but we are proud of how far we’ve come with this exercise!

What steps is Deltek taking to ensure biased terminology doesn’t end up in its code in the future?

What we are doing at Deltek, and what other organizations can do, is to put accountability on employees to recognize when this is happening – if you see something, say something! We also listen to feedback our customers give us and have heard their feedback on this topic. Those are both very reactive things of course, but we are also proactive. We have created guidance that identifies words that are more inclusive and also just good practice for communicating in a way that includes and respects others.

What advice would you give to other HR leaders who are looking to enhance DEI efforts within company technology? 

My simple advice is to start with what makes sense to your organization and culture. Doing nothing is worse than doing something. And one of the best places to start is by acknowledging this is not just an HR initiative. Every employee owns the success of D&I efforts, and employees want to help the organization be better. For example, removing bias terminology was an action initiated by our Engineering and Product Strategy teams at Deltek, not HR. You can solicit the voices of employees by asking for feedback in engagement surveys, focus groups, and town halls. We hear great recommendations from employees and take those opportunities to improve. 

 

Share article