FCA Fiat Chrysler Automobile Serbia's purchasing chief says he believes the number of global automakers able to incorporate the myriad leaps forward in technology currently flooding the market will halve with Silicon Valley companies jostling for entry into a crowded market.
Alliances between already-major companies have been in place for some time, but the scale of investment needed to embrace the rapidly-evolving world of mobility may see mega-manufacturers reduce from 12 to six, although not everyone agrees.
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"Everybody knows Google already made something like 1.5m miles, they are going in this direction very seriously," FCA Serbia purchasing director, Miodrag Ognjanovic said at this week's Central and Eastern European Automotive Forum in Prague. "I also read somebody committed in the future supply of interiors will make revolution about batteries or electric components – obviously the market is going in this way.
"For sure we expect from 12 carmakers, the number will be reduced by half, merging to exchange know-how in order to be ready completely for the new challenges and exchange know-how, which is extremely necessary for some level of renaissance of future trends."
Ever-increasing advances in technology however, will present their own supply chain issues as customers will still insist automakers deliver on time, despite the upped level of kit on board.
"We have to pay attention also to the supply chain because nobody wants to lose clients," added Ognjanovic. "Clients want more complex orders – we have to satisfy requests from clients.
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By GlobalData"In order to avoid increasing the price of suppliers, we have to work together to be ready for specific requests. In Serbia we have to verify because we are expecting large investment in order to follow these technologies.
"Are we going to have stable exchange rates in the future for this region? Economies controlled by the State – are all of them becoming open markets. Are we investing…to the right levels of equipment…in order to be aligned with the new technology."
The importance of Central and Eastern Europe was evident through the number of purchasing managers present in Prague this week, with the clear advantage of the major availability of labour at significantly reduced costs driving many OEMs such as PSA Groupe and myriad suppliers to base themselves in the region.
