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Automotive components; open innovation and research the keys for competitiveness
Dino Collazzo
As the automotive supply chain keeps churning out great numbers, megatrends such as autonomous driving, digitization, electric and hybrid technologies will usher in a great renovation in the sector. Here is how to move in the current scenario and gain new market shares
The Italian auto components industry bounced back. But to be truly competitive on International markets, new ideas, investments in research and development and an open innovation model must be viewed as necessary. Following the recent economic downturn, which eroded revenues and cancelled millions of jobs, the companies that successfully managed to stay in businesses adopted new strategies to return to their profits-making ways. Diversification of customers and markets as well as exports were the winning factors. The on-going global economic recovery is also a fact – though Italy is still lagging behind other European countries – and the Italian automotive market ended 2017 with almost 2 million new registered vehicles and a supply chain that is back on its feet. This segment, in fact, generated a total turnover of € 57.2 billion, 40 of which ascribable to the auto components supply chain.
In this context, 2018 promises to be a turning point, not so much in terms of volumes and turnover - pre-crisis levels are still a far cry -, as for the ability to invest in innovation: especially in production methods and products. And if Italian Component manufacturers aim to keep pace with international competitors, then they must learn to combine the value of "in-house" resources with "outsourcing".
Cars, with their load of new and hi-tech systems, are increasingly complex and sophisticated. And as time goes by, making them will require specific knowledge and components with a high level of technology, forcing companies to work on more advanced materials, improve power systems, develop new engines and enhance electronic devices. According to a study by Roland Berger and Lazard - Global Automotive Supplier Study 2018 - shared mobility, autonomous driving, digitization and electricity are the 4 megatrends that will play a decisive role in the future development of the automotive market. Specialized operators, therefore, are called on to transform their existing business models if they wish to grasp the opportunities coming from these trends. Yet, facing this challenge counting only on one’s own resources, might turn out to be counterproductive for companies that are looking at expanding in new markets. This is why, as Anfia points out in its latest report on the sector - Observatory on Italian automotive components 2017 -, the industry’s professionals must evaluate the possibility of creating synergies among themselves, perhaps through network contracts, not only vertical (suppliers and customers) but also horizontal (between competitors). Partnerships aimed at advancing their technological know-how. In practical terms, it’s a matter of focusing on open innovation, though, at the moment things are moving rather slowly.
According to ANFIA analysts, component producers, albeit inclined towards innovation, are still coming up against far too many obstacles in finding the necessary human, economic and financial resources needed to bolster their technological progress, thus allocating less resources to research and development compared to the main European competitors. If we carefully analyze each segment in the industry, the most active in the field of innovative products and methods were: systems operators and specialists, aftermarket companies, besides engineering and top design companies. In all these cases, however, the resulting technological up-grades were the consequence of autonomous activities (in-house innovation), enhancing the company's knowledge and expertise. A path of development that in the long run is destined to come up against a chronic lack of available financial and human resources. An issue that could be overcome taking advantage of open innovation strategies, as this would allow access to complementary and synergistic resources possessed by other potential partners. It is no coincidence that, as highlighted by Anfia's research, companies that steered towards open innovation policies have received positive results in terms of: cost reduction, greater economic performance and access into new markets. Therefore, it is precisely on this ability to develop innovative processes in collaboration with other companies, on enhancing in-house know-how and competence and investments in research and development, that Italian auto component producers will play their “game” in what appears to be, “the dawning of a new automotive era.”
In this context, 2018 promises to be a turning point, not so much in terms of volumes and turnover - pre-crisis levels are still a far cry -, as for the ability to invest in innovation: especially in production methods and products. And if Italian Component manufacturers aim to keep pace with international competitors, then they must learn to combine the value of "in-house" resources with "outsourcing".
Cars, with their load of new and hi-tech systems, are increasingly complex and sophisticated. And as time goes by, making them will require specific knowledge and components with a high level of technology, forcing companies to work on more advanced materials, improve power systems, develop new engines and enhance electronic devices. According to a study by Roland Berger and Lazard - Global Automotive Supplier Study 2018 - shared mobility, autonomous driving, digitization and electricity are the 4 megatrends that will play a decisive role in the future development of the automotive market. Specialized operators, therefore, are called on to transform their existing business models if they wish to grasp the opportunities coming from these trends. Yet, facing this challenge counting only on one’s own resources, might turn out to be counterproductive for companies that are looking at expanding in new markets. This is why, as Anfia points out in its latest report on the sector - Observatory on Italian automotive components 2017 -, the industry’s professionals must evaluate the possibility of creating synergies among themselves, perhaps through network contracts, not only vertical (suppliers and customers) but also horizontal (between competitors). Partnerships aimed at advancing their technological know-how. In practical terms, it’s a matter of focusing on open innovation, though, at the moment things are moving rather slowly.
According to ANFIA analysts, component producers, albeit inclined towards innovation, are still coming up against far too many obstacles in finding the necessary human, economic and financial resources needed to bolster their technological progress, thus allocating less resources to research and development compared to the main European competitors. If we carefully analyze each segment in the industry, the most active in the field of innovative products and methods were: systems operators and specialists, aftermarket companies, besides engineering and top design companies. In all these cases, however, the resulting technological up-grades were the consequence of autonomous activities (in-house innovation), enhancing the company's knowledge and expertise. A path of development that in the long run is destined to come up against a chronic lack of available financial and human resources. An issue that could be overcome taking advantage of open innovation strategies, as this would allow access to complementary and synergistic resources possessed by other potential partners. It is no coincidence that, as highlighted by Anfia's research, companies that steered towards open innovation policies have received positive results in terms of: cost reduction, greater economic performance and access into new markets. Therefore, it is precisely on this ability to develop innovative processes in collaboration with other companies, on enhancing in-house know-how and competence and investments in research and development, that Italian auto component producers will play their “game” in what appears to be, “the dawning of a new automotive era.”
