The last time we had a cover story focused on the automotive industry was way back in the summer of 2007. I had just joined Consulting magazine, but the story had been assigned and written before I arrived.
I just babysat it as the copy went down on page. Much of that article focused on how the industry would avoid what consultants referred to as "doom loops", which were defined as "systemic failures responsible for overcapacity, uncompetitive cost structures, and other symptoms that tend to receive more attention."
At the time, the U.S. automakers were being eaten alive by foreign manufacturers who had discovered operational efficencies that trumped the Big Three. The article went on to show how, for instance, the Ford Escape SUV and the Mercury Mountaineer SUV had fewer similar parts under the hood than the Toyota Camry and the Lexus SUV.
A number of Asian automakers, the article says, have fewer product platforms spread across many product models. Given what was about to happen to the automotive industry, and the Big Three, just about a year later, those types of "doom loops" seem almost quaint in comparison.
While there's no point in rehashing the ups and downs of the last five years, it's fair to say that the transformation of the automotive industry qualifies as "stunning," "historic," and even "inspirational" as the cover story points out.
This time around, the magnitude of the changes in the industry include breakthroughs in driverless operation, telematics, new powertrain concepts, new ultra-light manufacturing materials and new business models—including business models designed to profit from some Western consumers' declining interest in owning cars—especially those under the age of 25.
Now there's a challenge the auto industry certainly hasn't seen before. No doubt, automotive consultants are already hard at work trying to solve it.
Joseph Kornik
Publisher & Editor-in-Chief
jkornik@consultingmag.com
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