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Advanced Manufacturing and Mobility Business Minute
19 minutes | Aug 5, 2022
How consumer preference for EVs is evolving since the pandemic
In this episode, EY Global Advanced Manufacturing and Mobility analysts Gaurav Batra and Akshi Goel share insights from the 2022 EY Mobility Lens Consumer Index. Since the onset of the COVID-19 pandemic, transforming consumer behaviors toward travel and modal choices have been shaping the outlook of the mobility industry. As businesses continue to adopt hybrid working models, some of the shifts in mobility patterns are no longer temporary. In fact, both the work and nonwork journeys have declined by 11% and 8% respectively from the pre-pandemic levels. Furthermore, consumer confidence in electric vehicle technology is increasing. Nearly 52% of the consumers who intend to buy a car in the next 24 months prefer either a fully electric, plug-in hybrid or a hybrid vehicle. This growing shift is a result of many factors, including rising gas prices and environmental concerns. The 2022 EY Mobility Lens Consumer Index explores in detail how such consumer attitudes may impact the advanced manufacturing and mobility industry in the long term. Key takeaways: As multiple companies continue to implement hybrid working models, commuting is increasingly becoming a weekly activity — with 31% of the surveyed consumers working from home at least three to four times a week. For most car buyers, the electric vehicle is becoming the mainstream choice. In fact, 90% of all electric car buyers are willing to pay a premium price — due to rising environmental concerns and bans on internal combustion engine vehicles. For consumers, their personal cars have become the preferred modes of travel over the public transportation system — due to concerns over safety, hygiene and risk of infection.
32 minutes | Jun 17, 2022
How organizations can actively embrace diversity, equity and inclusion
In this episode, EY leaders Kevin Muskat and Darcy Cowell, Toyota Social Innovation Senior Manager Corey Clark, and VP and General Counsel of Interstate Batteries Kelvin Sellers discuss DE&I. Diversity, equity and inclusion are more than just buzzwords. A diverse, equitable and inclusive workspace fosters improved capabilities and higher growth rates. One of the first steps to attaining an inclusive space is to hold ourselves accountable. Businesses should rethink their talent sourcing strategy and take necessary steps to leverage the potential of DE&I. A diverse workforce encourages innovation, enhances decision-making and maximizes business potential. Organizations that understand inclusion, equity and diversity as a business imperative can benefit from it and strengthen their performance. Key takeaways: Significant diversity, equity and inclusion actions will make a difference in the community. Organizations will have to reach beyond internal activities and undertake community initiatives in local cities to have impact. Be curious and inquisitive and not judgmental. Get involved — not just in your company's opportunities, but also personally — to become part of the journey of embracing diversity. Large corporations with large employee bases can team up and work together to better the DE&I agenda. Rather than being a passive bystander, commit to become an active upstander. DE&I is an opportunity to connect with many people.
10 minutes | Jan 19, 2022
How product innovation is proving to be a differentiator in mobility
In this episode, EY Global Advanced Manufacturing & Mobility Analyst Avinash Sagar shares key updates from the third quarter earnings calls of 43 mobility sector companies. After a turbulent year, the global automotive sector is showing positive signs of recovery. However, amid a surge in demand, the automotive original equipment manufacturers are still facing challenges to meet the orders due to various market forces. Factors, such as demand patterns, value chain breakdown, consumption behavior, operating costs and new entrants, are forcing automotive companies to rethink their business strategies and restructure their operations. To maintain a competitive advantage over their peers, the mobility companies are acquiring companies operating in areas, such as battery cell manufacturing, vehicle-to-everything software and autonomous driving. Although impacted by supply chain disruptions and raw material shortages, the mobility industry remains confident of leading recovery in the coming months. The automotive companies are optimistic that proactive measures, such as product design and innovation, and business restructuring, can help them achieve their long-term business goals. Key takeaways: Automotive suppliers remain confident in recovering their volumes and achieving profit margins due to the effects of electrification trends, cost management programs and strategic partnerships. Changing consumer behavior and mass adoption of digitalization has given the mobility industry a new revenue opportunity. The companies are responding by taking greater control of the digitalized services instead of leaving them for a third party. Logistics providers are investing in technology to reduce operational inefficiencies, improve supply chain visibility and increase collaboration with consumers. The advent of new entrants in the transportation and logistics space is slowly transforming the industry’s landscape.
17 minutes | Jan 19, 2022
Three priorities for advanced manufacturing in 2022
In this episode, EY global analysts Mohit Ahuja and Julia Rosenthal share highlights from 3Q21 earnings calls of 31 advanced manufacturing companies. In the resurgence of the advanced manufacturing sector, sustainability, transparency and resiliency have become dominant themes. Companies are centering their future initiatives around these three pillars and aligning their current business operations with them. Furthermore, companies plan to undertake several measures to capture market share in emerging areas, such as electric and autonomous mobility, infrastructure decarbonization, sustainable buildings, and renewable energy. In 3Q21, manufacturing companies dealt with soaring operating costs, uneven demand patterns and severe value chain breakdowns, and in response, they carried out the reinvention of their supply chains. They also took measures to restructure their business, capital strategy and competitive positioning. As the manufacturing sector continues to recover, it is optimistic that the operating costs will stabilize. Consequently, companies expect that their margins will increase. They are confident that the supply chain disruptions will subside once the effects of a more visible supply chain start to kick in. Key takeaways: The advanced manufacturing sector plans to invest in digital to achieve operational efficiencies, expedite product innovation and improve visibility across the value chain. Advanced manufacturing companies are recognizing the importance of meeting customer expectations in order to maintain strong relationships and hold onto their market shares. In a bid to transform into sustainable, transparent and resilient businesses, companies are operating proactively. They are launching sustainable products, such as net-zero connected buildings and electric aircraft, to meet their decarbonization targets and enhance ESG reporting. Access to timely and relevant data is helping companies to create transparent and robust supply chains.
13 minutes | Sep 23, 2021
What factors are driving end market recovery for manufacturers
In this episode, EY global analysts Julia Rosenthal and Mohit Ahuja share their insights on the top themes discussed by leaders during the 2Q21 public earnings calls. 2020 was a tumultuous year for all sectors globally, including the advanced manufacturing sector. Supply chain disruptions, raw material shortages and forced shutdowns caused a significant dip in production levels. However, it seems that one of the hardest-hit sectors, advanced manufacturing, is on the road to recovery, though the pace of recovery is likely to be uneven. Most manufacturers are confident of the recovery in end markets and are providing positive outlooks for the remainder of 2021. The recovery will be primarily driven by the mass-scale vaccination programs, higher uptake of services, and partnerships and acquisitions. However, manufacturers will need to work on future-proofing their businesses by strengthening supply chains and reviewing risk mitigation strategies. Key takeaways: As disruptions are likely to endure through 2021, manufacturers are automating production to increase utilization, contracting alternative suppliers, implementing price hedging and signing long-term contracts to mitigate disruptions in production schedules and minimize financial losses. Despite supply chain disruptions and the resulting revenue impacts, most manufacturers are confident of recovery in end markets and are providing positive outlooks for the remainder of 2021. The global vaccine rollout is a boost for manufacturers. While supply chain disruptions and raw material cost increases are still a challenge, many manufacturers are experiencing increased demand as end markets pick up again.
12 minutes | Sep 23, 2021
How the pandemic triggered a shift toward sustainability
In this episode, EY Global Advanced Manufacturing & Mobility analysts Avinash Sagar and Akshi Goel share their insights on some interesting findings from the 2Q21 public earnings calls. The mobility sector has been among the hardest hit during the COVID-19 pandemic. However, the picture is improving. Pent-up demand is driving growth in the automotive sector, with considerable growth recorded in the US and Asia-Pacific. This demand will continue to dominate in the next quarter. In an exciting shift arising from the pandemic, consumers are turning toward sustainability — and they expect mobility players to expand their offerings in the electric vehicle (EV) segment. Automakers are also driving innovation with a commitment to sustainability across the value chain. This trend is likely to continue for the next few months. Key takeaways: “Demand patterns” has emerged as the leading market force. The US is witnessing record growth in the automotive segment. While sales in Europe are gradually improving, the robust consumer demand in Asia-Pacific is likely to achieve pre-pandemic levels by the end of 2021. On the company response side, businesses are focused more on competitive positioning than on customer acquisition and connectivity. Logistics companies are leveraging differential pricing strategies to stay competitive. Supported by a substantial shift in consumer demand toward green products, many automakers are driving innovation with a commitment to decarbonization across the value chain.
11 minutes | Aug 18, 2021
How environmental concern became the top driver for purchasing an EV
In this episode, Gaurav Batra, EY Global Advanced Manufacturing & Mobility Analyst Leader, discusses the findings of the latest EY Mobility Consumer Index (MCI) wave 2 research. Almost 41% of those looking to buy a car are considering buying an electric vehicle (EV). The EV sales boom is a part of a wider resurgence in car buying. Catalyzed by nonwork-related journeys and coupled with concerns over the safety of public transport, cars are considered a safer and more convenient choice for travel even as the pandemic risk declines in many countries. Though the prospect of an EV sales boom is good news, overcoming concerns over the cost and performance of EVs will be a challenge for automakers. Key takeaways: There is a shift in the type of travel being undertaken and the modal choices. While nonwork-related travel is set to recover globally, work travel intentions remain in the slow lane. Sales of all kinds of cars, EVs and internal combustion engines (ICEs) are expected to rise. For the first time, environmental concerns are topping the list of reasons for considering an EV across all age groups. Cars (in various forms) remain the safest and most convenient form of travel over public transportation, even as the pandemic risk declines in many countries.
15 minutes | Aug 4, 2021
How manufacturers are transforming themselves to be future-ready
In this episode, EY global analysts Julia Rosenthal and Mohit Ahuja share their insights on how manufacturers can prepare for end-market recovery. Advanced manufacturing companies are transforming themselves into future-ready enterprises. Organizations are making sustainability a core part of their business strategy as they now recognize the opportunity for tremendous value creation through sustainable offerings. Companies are also adopting digital measures to safeguard business continuity. However, while demand in key regions and end markets continues to recover, supply chain disruptions and rising raw material prices are eroding margins. And although accelerated digitalization is likely to provide resiliency in operations, companies are actively looking to create long-term value by capturing new sources of revenue. Key takeaways: Stricter emission regulations and a shift in customer attitude toward sustainable products are making manufacturers realize the tremendous value that a sustainable enterprise can generate. To become a future-ready connected enterprise, companies are undertaking multimillion-dollar digital investments, increasing the share of high-margin digital offerings and connecting their installed base to create differentiated solutions. Competitive positioning is the top company response this quarter with advanced manufacturing peers closely monitoring and evaluating their product pricing strategy to account for rising costs. Many are increasing product prices to maintain margins.
10 minutes | Aug 3, 2021
How mobility companies are preparing for demand rebound
In this episode, Akshi Goel, EY Global Advanced Manufacturing & Mobility Analyst, explores the top market forces and provides a perspective on shifts in the mobility sector. The global automotive sector is witnessing mixed recovery in 2021. Some markets are gaining traction, while others reflect demand pressures due to partial or complete lockdowns during the pandemic. While the US is showing strong demand rebounds as vaccination rollouts continue, Europe is expected to witness growth in the second half of 2021, following widespread vaccinations. Manufacturing is likely to remain stressed through 2021 owing to increased volatility and disruptions in the lower tiers of the supply chain. Therefore, for mobility companies looking to stay ahead of the curve, the best course of action is to stay responsive to changes and futureproof their existing supply chain strategies. Key takeaways: Demand patterns is the top market force this quarter. E-commerce continues to drive demand for logistics and commercial vehicle companies. Product design and innovation is the top company response this quarter. Driven by tightening emission regulations across markets and consumer demand for green mobility, automakers are investing in green mobility manufacturing and deployment. Overall, the mobility industry has developed a clear view of supply chains, but it continues to operate in reactive mode. Organizations could stay ahead of the curve by being resilient and planning effectively to minimize the impact of the next disruption.
12 minutes | Apr 1, 2021
What renewed demand means for the mobility sector
In this episode, Akshi Goel, EY Global Advanced Manufacturing & Mobility Analyst, shares her insights on the top themes discussed by mobility leaders during the 4Q20 public earnings calls. The mobility industry continues to witness recovery in consumer demand as the pandemic acted as a catalyst for shifts in consumption patterns toward e-commerce and sustainability. However, demand recovery across sectors could further intensify raw material shortages. And, while the mobility sector did manage challenges posed by the pandemic through agility in decision-making, resiliency in operations, accelerated digitization and leaner cost structure, companies still need to prepare for rising uncertainty associated with geopolitical risks. Key takeaways: Developments in end markets: automotive peers are witnessing a strong recovery in consumer demand; however, the impact of disruption continues to reflect on performance. Logistics peers are witnessing sustained growth arising from e-commerce activity. Competitive positioning: achieving the optimum product price and customer mix remains a top priority with mobility peers. Original equipment manufacturers (OEMs) have set up a strong product pipeline with a focus on sustainability and connected vehicles. Business reorganization: several peers are reporting performance improvements due to lean cost structure and rationalization of product portfolios toward high margin segments.
14 minutes | Apr 1, 2021
Why digital is the way forward for advanced manufacturing companies
In this episode, EY global analysts Julie Rosenthal and Mohit Ahuja share their insights on shifts in the advanced manufacturing landscape. During the 4Q20 quarterly public earnings calls, leaders of advanced manufacturing (AM) companies discussed some of the poignant changes occurring in the industry. One very prominent theme that stood out in these discussions was digital transformation in manufacturing and how COVID-19 had accelerated its adoption in the industry. The arrival of the digital era shaped decisions made by aerospace and defense (A&D), industrial products (IP) and chemical companies during 4Q20. Key takeaways: Changes in financial outlook: capex-driven sectors are witnessing positive demands, whereas commercial aerospace remains subdued. Meanwhile, defense and space are observing robust demand. Business reorganization or restructuring: companies continued to consolidate manufacturing facilities and office footprints, and lower headcount. Many firms witnessed cost improvements through structural changes and material cost savings through supply chain programs. Product design and innovation: manufacturers are undertaking digitization of existing products and launching connected offerings. Many are connecting their large installed base to internet of things (IoT) platforms, and supporting the launch of 5G and modern networking technologies for space equipment.
17 minutes | Mar 8, 2021
How organizations can actively support women on their path to leadership
In this episode, Randall Miller, EY Global Advanced Manufacturing & Mobility Leader, and participants from the Women’s Network share insights on the program and challenges women face during their careers. International Women’s Day (IWD) is an important global celebration of women’s achievements and is an opportunity to highlight what needs to be done to close the gender gap. At EY, we believe that gender equality is the key to unlocking business growth and helping societies to thrive. To underpin EY ambition to inspire and accelerate gender equality and social equity in the working world, the EY Advanced Manufacturing & Mobility (AM&M) Industry Market has established the AM&M Women’s Network. The main goal of this network is to support top female talent on their path to achieving their career goals, as well as learning about and removing any barriers that prevent them from having equal opportunities in the firm. Key takeaways: Increasing the number of women in leadership roles is a top priority for the EY AM&M Industry Market. To contribute to the collective effort toward impactful change on gender equality, organizations should promote women’s achievements, challenge gender stereotypes and biases, introduce policies that support women’s careers and advocate for equal pay. Now is the time to go further and faster in accelerating gender equality and making sure #SheBelongs.
22 minutes | Feb 12, 2021
What an autonomous racecar could mean for the future of mobility
In this episode, Steve Patton, EY Americas Mobility Sector Leader, and guests from Clemson University International Center for Automotive Research share their insights on Deep Orange, a vehicle prototype program. Ernst & Young LLP has collaborated with Clemson University and its Deep Orange program to advance autonomous vehicle (AV) technology. Deep Orange, currently in its 12th year, is an educational framework within the Department of Automotive Engineering at Clemson University. Every year, as part of the program, students are given new challenges. This year, the challenge is to build an autonomous racecar that could race at 200 miles an hour at the Indianapolis Motor Speedway. The challenge has been designed to lead the students through a process that an automotive original equipment manufacturer (OEM) or supplier might go through while they're developing a vehicle. It is a unique way to educate students in the systems integration of vehicles. Key takeaways: Ernst & Young LLP has collaborated with Clemson University and its Deep Orange 12 program to advance autonomous vehicle (AV) technology to be used by 30 global teams from 39 universities in the Indy Autonomous Challenge. Through the program, Clemson graduate students are designing the competition base vehicle and have tackled industry challenges such as integrating sensors with computer hardware, analyzing constraints in perception sensors, and addressing safety concerns. Deep Orange helps students develop a systems perspective, giving them the opportunity to work with technologies and overcome challenges that have real-world implications – and as a result, accelerating the future of mobility.
10 minutes | Jan 4, 2021
How the mobility sector is re-emerging in a post-COVID-19 world
In this episode, Akshi Goel, EY Global Advanced Manufacturing & Mobility Analyst, shares her insights about the key themes discussed by mobility sector leaders during the third quarter earnings calls. In the second quarter, mobility companies were grappling with the impact of the COVID-19 pandemic on supply chains, trying to ascertain its longer-term ramifications. Now in the third quarter public earnings calls, mobility companies have come to the realization that to stay relevant into the future, they must be equally bold about the depth and pace of their transformation. Key takeaways: Business reorganization: companies are restructuring core processes to suit digitalization initiatives, and leveraging digital to drive cost reductions and increase efficiency for long-term success. Competitive positioning: mobility peers are planning to enhance their competitive advantage in a recovering market as they strengthen their product mix going forward. Change in financial outlooks: despite a gradual recovery in major markets across the globe with more relaxed regulations and economic activity restarting, automotive peers are expecting low sales in 2020.
13 minutes | Dec 22, 2020
How manufacturers are preparing for a post-COVID-19 recovery
In this episode, Julia Rosenthal, EY Global Analyst for Advanced Manufacturing, shares her insights about the key themes discussed by leaders during the third quarter public earnings calls. The COVID-19 crisis and related concerns still remain a major challenge for advanced manufacturing (AM), especially automotive, aerospace, and oil and gas companies. Among the top themes discussed by leaders of AM sector companies during the third quarter public earnings calls are: developments in end markets, business reorganization or restructuring, and competitive positioning. Key takeaways: Business reorganization or restructuring: cost reduction drove streamlining activities at many companies. Divestitures allowed companies to better focus resources on key growth markets while acquisitions were held to make cost savings targets stringent. Competitive positioning: product and service quality are gaining importance as manufacturers hold onto market share. Outcome-based pricing models are being offered more frequently. Acquisitions and joint ventures are enabling companies to bring differentiated products and services to market more quickly. Customer acquisition and connectivity: manufacturers are prepared to invest in understanding their customers better. Sales teams are being expanded in growth markets, enabled by new technologies.
12 minutes | Dec 14, 2020
How automotive dealers and manufacturers shift from physical to digital
In this episode, our speakers share insights into the shift the automotive dealership and original equipment manufacturers have had to make to engage a new digital native customer. The COVID-19 pandemic became an opportunity to fast track the digitization of the automotive sector. Manufacturers and dealers have had to shift their way of operating to encompass the new digital native consumer and a “digical” – digital and physical – way by which automotive cars are purchased by consumers. Key takeaways: Dealership model changes: a shift to online customer purchase behavior accelerated due to COVID-19; customers can interact and receive an online experience for purchase of both new and used cars. Collaboration for OEM (original equipment manufacturers) and dealers; a fast evolution of the end-to-end transaction has shifted online, including payments, and deliver. Future forecasting: what kind of purchase models are consumers likely to encounter in the new digitized dealership world and how will they receive the best service?
12 minutes | Nov 6, 2020
How mobility companies seek ways to stay relevant amid disruption
In this episode, Akshi Goel, EY Global Advanced Manufacturing & Mobility Analyst, shares her insights about the key themes discussed by mobility sector leaders during the second quarter earnings calls. The COVID-19 pandemic quickly became a global threat in the first quarter of 2020 and mobility companies found themselves facing complex decisions, as several production sites worldwide closed down and supply chains were disrupted. There were no surprises in the second quarter as well. Mobility companies are in a dire situation as the crisis has intensified supply chain issues in an already complex ecosystem. Key takeaways: Operating costs: targets for cost management programs were increased by many companies. The crisis has led to widespread cost-restructuring programs and austerity measures, including layoffs and furloughs. Financial initiatives: mobility companies are working on their capital management strategies to secure financial stability. Also, discretionary spending and capital expenditures are delayed or suspended, and companies are actively using credit and debt financing strategies to achieve a strong liquidity position. Product and service innovation: original equipment manufacturers (OEMs) are struggling to support their internal combustion engine legacy businesses, and simultaneously investing in the transition to electric vehicles.
12 minutes | Oct 30, 2020
How manufacturers are exploring every avenue to stay resilient
In this episode, Julia Rosenthal, EY Global Analyst for Advanced Manufacturing, shares her insights about the key themes discussed by leaders during the second quarter public earnings calls. As COVID-19 became a global threat in the first quarter of 2020, manufacturers had to make some very complex decisions. For advanced manufacturing companies, the second quarter proved to be just as difficult as the first one. This was the quarter in which some of the most widespread lockdown activities were taking place around the world. Companies reduced costs and shifted their focus to long-term growth, as COVID-19 caused many of their customers to shut down operations. Key takeaways: On financial initiatives — some manufacturers said that they would remain committed to their R&D investments while others pulled back as part of cost-reduction strategies. Share buyback and dividend activities have picked up. Operating costs — many companies raised the targets in their cost management programs. Leaders talked about restructuring programs, more offshoring of operations and new automation efforts. Culture and talent — overall, there has been a greater focus on enterprise-level cost savings from reduced headcount.
12 minutes | Sep 25, 2020
How manufacturers can future-proof their supply chains
Over the years, companies have committed to cost-effective, just-in-time supply chains. This lean and linear approach has been a successful strategy for limiting inventory and minimizing working capital. But as the erratic demand and unprecedented disruption from the COVID-19 pandemic take their toll, the lack of resiliency of modern supply chains is coming into greater focus. Granted, the current pandemic is one of the more extreme examples of disruption in recent history, it certainly isn’t the first and is unlikely to be the last. How can manufacturers reinvent supply chains that can flex under pressure without a total loss of cost-effectiveness? Further, how can they gain greater visibility to better anticipate and plan for the next disruptive event? Key takeaways: Most traditional and modern supply chains do not have the capability to be very resilient or flex with a major disruption due to their linear nature. To build supply chain resiliency, manufactures should think through all the scenarios that can happen, review business continuity plans, look at just-in-time models, perform stress tests, and conduct an annual risk mitigation plan and review. Digital process mining and digital twins are powerful technology tools that can visualize the effects of disruptive events such as the COVID-19 pandemic, and therefore help companies come up with contingency plans and achieve business continuity.
18 minutes | Sep 25, 2020
How transportation will be revolutionized by data analytics
In this episode of the Advanced Manufacturing and Mobility Business Minute, Kevin Custis, our Global Transportation Industry Leader, shares his insights on the critical issues the transportation sector is facing as we emerge from the COVID-19 pandemic. During the podcast, Kevin discusses: How is the COVID-19 crisis impacting the transportation sector; is it different from other crises? What are some of the important trends in transportation that are transforming the marketplace? What are the demand trends that will impact the transportation sector? How important is the adoption of technology in transportation post-COVID-19? Will hiring practices in transportation match the new normal? Given the ongoing transformation, how important are collaboration and partnerships now in transportation? As companies are looking to build up their supply chain resiliency, how can the transportation sector support their clients in this effort? Key takeaways: Consumer buying behavior has influenced supply and demand during the crisis. Disruptive technologies will play a large role as businesses review supply chains and asset utilization. Utilization of AI, data analytics, automation and blockchain will greatly impact transportation, potentially improving core metrics by 5 to 10 times.
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