Automotive Manufacturers Not Ready for Digital Transformation

The collaboration between KPMG's executive research company Egon Zehnder revealed that the automotive industry was left behind the cultural change required for digitalization.

The research conducted by international tax, audit and consultancy firm KPMG together with senior executive research company Egon Zehnder showed that the world's leading automotive companies are not prepared for digital transformation that destroys their sectors.

527 automotive manager, one of the giant brands worldwide, participated in the research. The research reveals that there is an awareness of almost all of the industry against digitalization, yet there is no preparation at the strategic and cultural level.

KPMG Ölekl Hakan from Turkey, "Research clearly demonstrates that the automotive industry is still traditional 'production optimization' mentality stuck in the state. New players entering the sector have the advantage of playing only with new cards. Classic sector players, on the other hand, have to change tires while the vehicle is in motion. ” Ölekli emphasized that this situation should not be perceived as a disadvantage because it can be turned into an important advantage with the right steps.

Some highlights of the research are as follows:

• While 92 percent of respondents state that they are convinced that a new and different cultural approach is imperative to keep up with the digitalization that changes the sector, only 29 percent recognize 'fail first, fail fast' prematurely and fail as soon as possible. He thinks that the method is a guide for this new approach.

• 57 percent of executives say that the prerequisite for digitalization is process changes. Cultural change and leadership awareness are at the bottom of the list.

Not a pioneer

• When asked about the use of artificial intelligence and other digitalization technologies, approximately 50 percent of respondents state that their strategy is to be an early follower of these technologies. However, only 40 percent say they want to be the first to act in these areas.

Old and new together

• 66 percent of the participants think that there is a need for a combination of traditional and new business models, while 34 percent say they believe in a complete return on products and business models.

Cooperation is a must

• Over 60 percent of the managers participating in the research agree that they need to collaborate for a successful digitization process rather than competing with their competitors. While this rate is around 80 percent for CEOs and C-suite level managers, it drops to 19 percent for department managers.

• 80 percent of executives say their company has only one digitalization strategy. Only 12 percent say they have implemented different strategies in this area.