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Automotive Industry and Emerging Markets

Automotive Industry and Emerging Markets. Sanjay Rishi Global Automotive Industry Leader IBM Global Business Services. Globalization. Innovation.

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Automotive Industry and Emerging Markets

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  1. Automotive Industry and Emerging Markets Sanjay Rishi Global Automotive Industry Leader IBM Global Business Services

  2. Globalization Innovation We are at a historical inflection point…..with revolutionary changes transforming the global economy ….and the emerging markets are at the epicentre of this change

  3. Emerging markets have fueled the growth of the automotive industry … and will move towards becoming net exporters Source: 2007-08 OESA Industry Review, JD Power Automotive Forecasting

  4. China, India, and Russia have the fundamentals for continued growth Macro Economics China India Russia Source: 2006 The World Fact Book, Business Monitor Median Age - 2025 GDP Rank 10-20 year difference in median age “YOUTH PREMIUM” Source: U.N. Department of Economic & Social Affairs, Population Division Source: Dreaming with BRICs: The Path to 2050. Goldman Sachs

  5. Recent investments into Russia alone exceed $2.5B – partnerships with federal and regional governments can provide large tax advantages Asian carmakers are expected to assemble more than a half of all foreign cars in Russia by 2010 Source: Datamonitor

  6. Understanding specific nuances in each market is critical to establishing successful, sustainable partnerships • Shortage of skilled labor is a serious challenge • Inadequate infrastructure will impede growth • Roads, Ports • R&D capabilities – an opportunity • Conflicting interpretations of IP rights drive investment strategy • Issues exist with collateral and ability to assess credit risk for vehicle purchases • Establishing brand affinity is a key Source: IBM IBV: Inside India, 2007; Inside China, 2006

  7. There are three key actions that enable growth in emerging markets • Establish deep government, university and business community relationships • Build local talent in a fiercely competitive market • Ensure business integrity • Create local ecosystem of partnerships • Open collaboration and trust

  8. Building and sustaining these new ecosystems of partnerships will enable successful Globally Integrated Enterprises • New networks for innovation • Focus and speed • New sources of high-value skills and knowledge • New business models and corporate structures

  9. Sanjay Rishi Global Automotive Industry Leader IBM Global Business Services sanjay.rishi@us.ibm.com

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