Market & Technology

The changing face of the
Automotive industry
Semcon has extensive experience of development projects for the
automotive industry – an industry that has long been characterized
by major volumes, but also by tight competition and high speed in
introducing new technique. The answer to manage has been
consolidation, where the major manufacturers currently account for
around 83 per cent of the world's vehicle production.

These companies achieve benefits of scale by manufacturing many
different brands using the same base plates. Tougher global
competition has led to demands for more rapid model changes such as
each manufacturer must be able to provide a wider product range.
A range where every model is developed according to specific areas of
use and concentrated on well-defined target groups. If we look at the
world's leading manufacturers current model portfolios and add their
planned investments up to 2010 the conclusion is that automotive
manufacturers will, over a relatively limited period, annually increase
investments by many billions of EUR. Many of Semcon's customers
have major investment plans for the coming years. Annual growth for the automotive  industry is estimated at around 2.6 per cent until
2015, which means that the industry's ability to add value in
production and product development amounts to around
EUR 903 billion, compared to todays EUR 645 billion. A result of
significantly higher levels of qualified engineers means that manufacturers' own development centres and external
development companies like Semcon will be well stocked with
assignments for a long time to come.

European automotive manufacturers are very well equipped to face
global competition, and together with Toyota of Japan they are moving forwards in terms of the development of new models and versions.
We also find that the commercial vehicle industry sector has dominant
companies within Europe, such as AB Volvo, Scania, MAN and DaimlerTrucks.

New competitors are also establishing on new markets in the
automotive industry, which is mainly driven by the strong
growth in BRICK countries. Russia is the market that's shown the
sharpest growth in 2007, a trend expected to continue in 2008.
The strong market growth attracts capital and direct investments,
whichmean that the development of new products and models in
the future will come from BRICK countries.