NEW YORK, N.Y. – A new wave of optimism is overtaking the U.S. auto industry as it rebounds from the depths of the recession and a brutal restructuring, according to Booz & Co.’s second annual U.S. Automotive Industry Survey and Confidence Index.
Bullishness and optimism prevailed in the survey results, said Scott Corwin, a partner at Booz & Co.
"Auto executives clearly believe the industry is back," Corwin said. "It has emerged from the lows of the 2009 recession with a much stronger and more stable foundation. The newly restructured industry is leaner, is stronger and has gone ‘back to basics’ – paving the way for a brighter, more profitable future."
In February and March of 2012, Booz & Co. surveyed more than 200 executives from more than 75 automotive vehicle manufacturers and suppliers. Relative to last year, industry executives who participated in the survey are significantly more bullish on the state of the automotive industry, Booz & Co. states. Ninety-four percent of OEMs and 92 percent of suppliers described the industry as either "somewhat better" or "much better" than last year.
Based on survey results, Booz & Co. noted four key factors that emerged from the survey that it feels will shape the automotive industry in the next two years:
* Re-emergence of Fundamentals: The U.S. auto industry has learned the tough lessons of recession-driven restructuring, and this is driving a "back to basics" approach focused on strengthening balance sheets, producing excellent vehicles, and not letting supply get ahead of demand.
* Shifting Demand Centers: Emerging markets are gaining steam, and all automakers need to learn how to deal with different economies, consumers and competitors.
* Powertrain and Technology Uncertainty: Alternative powertrains are still in play, but their success depends largely on government support and fuel prices. The industry is moving toward fully digital, connected cars, but automakers are struggling to decide what to place their technology bets on, and how.
* Interconnected Supply Chain: The unfortunate events of the Japanese tsunami and floods in Thailand brought home the interconnectedness of the global supply chain. Ninety-two percent of OEMs and 85 percent of suppliers say they are seeking ways to mitigate these risks in the future.
"Walk on almost any car lot and you will see that this has definitely been a product-led renaissance. Coming out of the industry restructuring, OEMs and suppliers have addressed a number of fundamental problems in production capacity and labor, and are demonstrating much greater discipline around product and pricing," said Brian Collie, a partner at Booz & Co. "If the industry can stay disciplined and preserve the efficiencies it fought so hard to implement, the future looks bright and profitable."
To see a full copy of the study, click here.
