Results from the third annual EY (formerly known as Ernst & Young) survey of the automotive industry were released last week at the Geneva Motor Show, and, paradoxically, they’re both not surprising and a little alarming.
According to the Changing Lanes report, 88 percent of auto executives do not have the confidence to implement data and analytics initiatives; 88 percent feel unprepared to attract and retain talent, and 80 percent feel unprepared to respond to market volatility. Taken together, those are potentially serious problems for an industry that is being rapidly redefined by technological leaps and changes in consumer behavior.
As seen, for instance, in the new Ford experiment with electric bikes, car makers are painfully aware that Millennials are much less interested in owning cars than their predecessors, and therefore know they need to diversify their transportation offerings.
Auto companies must also cope with customers who expect their cars to act like their smartphones—or at least they expect their phones to seamlessly connect to their cars. In the EY survey, 71 percent said they see advanced vehicle features (like connectivity) as key to driving brand loyalty, but only 39 percent of executives feel prepared to deliver on the changes needed. There are some in the industry who are leading the way in regards to innovative thinking—Ford comes to mind—but the survey reveals there aren’t nearly enough.
Randy Miller, EY’s global automotive and transportation sector leader, said car companies will have to move toward innovation more quickly to thrive in the future. “Especially when it comes to the connected car or autonomous vehicles, they need to move faster,” he said.
Another huge issue looming for auto manufacturers: Talent. Eighty-eight percent of the automotive leaders surveyed said they feel unprepared to attract the top talent they’ll need to compete. There is another area where car companies are going to have to get with the times ushered in by Silicon Valley.
Employers like Ford (NYSE: [[ticker:F]]) and GM (NYSE: [[ticker:GM]]) need IT talent rivaling that of companies like Facebook (NASDAQ: [[ticker:FB]])—in areas like mobile and analytics, for instance—and they won’t attract top-notch employees by offering drab offices without the standard ping-pong/free lunch/flexible workplace perk package that is the norm in tech companies. Miller also suggests that companies start embedding programmers into business units and making sure they’re intimately involved with product launches.
When asked if EY gathered information about the survey participants’ age, he said the company had only done some “generational” studies. Those findings confirmed that there are significant differences in the workstyles of Baby Boomers, Generation X, and Millennials.
“A better talent strategy is needed globally when it comes to these changing demographics, especially when it comes to the hiring, promotion, and development processes,” Miller said.
For the Changing Lanes study, EY interviewed 125 global executives to find out what’s on their agendas in 2015-16.
