In our new ”Industrial Blog” we will bring you the latest news and insights of the diverse group of business sectors that make up the Industrial Industry. While the focus of McKinney Consulting is Korea and Asia, the influences on the industrial business sectors go beyond borders. What goes around trends to go around!
A perfect example of this is within the automotive industry. We are facing developments in this industry now that have long term implications. In the beginning automotive manufacturing and sales were almost all in house and was kept insular to other industries or developments. That was then, this is now. The automotive industry is much more integrated and dependent upon other industries. Dependence on companies outside of the main automotive manufactures in niche areas for development and collaboration is the new norm.
William Clay Ford Jr., the great-grandson of Henry Ford and the executive chairman of Ford Motor Company recently described in a McKinsey Quarterly interview on how Ford is travelling in unchartered territories. He said, “Today’s automakers confront developments that will affect the industry for decades: swelling megacities, self-driving vehicles, new technology challengers, and digitally connected cars—among others.”
In regards to the way they use to do business, he described how disruption is coming at them from every angle. He further said, ”That’s all been turned on its head; we now have disruption coming from every angle, from the potential ways we fuel our vehicles to the ownership model. We have a whole generation that just wants access to vehicles as opposed to ownership—for example, through services such as Uber, Zipcar, and RelayRides. Even the dealership model is changing, with Tesla selling directly to consumers.”
In regards to Uber, they have already arrived in Korea. Just two weeks ago at the Korean Business Leaders Alliance (www.KBLA.info) “What’s Next Seminar?” we had a meeting with the General Manager of Uber, Mr. Calvin Kang. In attendance at the Grand Hyatt Hotel, Seoul was 40 senior leaders of various multinational companies based in Seoul. We learned that this disruptive technology and business model of Uber has many possibilities that go way beyond just providing taxis. They claim to have already contributed 2.8 Billion US dollars in America per year and 20,000 new jobs per month are being added to the work force at reasonable salary levels. Their success is not going unnoticed as they have already received 1.5 Billion dollars of capital investment.
Mr. Ford, also iterated that: “In terms of connectivity, so much of the technology is being developed outside the auto industry. Whether it’s vehicle-to-vehicle and vehicle-to-infrastructure communication, semiautonomous and fully autonomous driving, or connecting to the cloud—these are all major trends coming at us fast and furiously.”
It is interesting to learn of these developments within the automotive industry and watch how they cross over into other industries such as technology and consumer industries of which we also serve. In future blogs we will dig deeper on all of these areas of development. Stay with us.