Detouring Doom Loops

As the automotive industry's road map to profitability becomes increasingly convoluted, can consultants navigate the way?

| June 05, 2007

As the automotive industry's road map to profitability becomes increasingly convoluted, can consultants navigate the way?

When asked about changes in the automotive industry, Deloitte Services Managing Director Paul Wellener immediately turns to look at the 2006 top global vehicle manufacturers list tacked to his office wall. There are 49 original equipment manufacturers (OEMs) on the list. "In the future, there are going to be far fewer than 49 companies here," he says.

The consulting implications of OEM consolidation, similar consolidation among automotive suppliers, and the problems vexing North American automakers are massive. Consolidation will produce truckloads of postmerger integration engagements and the technology, human resources, and process consulting that large restructuring efforts automatically spark. Plus, automakers in North America and, increasingly, Western Europe are hungry for innovative ways to deal with overcapacity, legacy costs, and other front-page challenges that their Asian competitors have nimbly dodged.

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