Storm Clouds on the Horizon: Restructuring Risks Facing the Auto Industry

While the economy overall is strong and vehicle sales are still robust, there are risks in the industry that may affect the supply chain and cause disruptions throughout the year. Chief among these are the ongoing concerns regarding tariffs on products such as steel and aluminum, along with the on-again, off-again trade disputes with China.

In addition to the upheaval in global markets, the shift away from passenger cars and toward trucks and sport utility vehicles has caused automakers to realign their product offerings and even end the production of several car models. For suppliers, who have been dependent on contracts to provide parts for these vehicles, this realignment could be problematic. In addition, higher interest rates may complicate financing for businesses that need additional capital to address these changed circumstances.

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Adoption of Artificial Intelligence in Manufacturing Accelerating

vehicle manufacturing

The rapid adoption of Industry 4.0 technologies leaves manufacturers with a choice: accelerate with the market or be left behind.  According to a 2019 Global Market Insights, Inc. report, the market for artificial intelligence in manufacturing will grow to $16 billion by 2025.  Factors driving the adoption of Industry 4.0, the general name given to the deployment of cyber-physical systems, Internet-of-Things technologies and cognitive computing in the manufacturing environment, include:

  • Reducing the cost of operations
  • Enhancing operational efficiency
  • Aligning operations with customer requirements
  • Analyzing processes in real-time
  • Scaling operations without intensive capital cost

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IP Considerations for Autonomous Vehicle Technology Startups and Automotive Suppliers

infrastructure

Many automotive suppliers and OEMs have announced plans to bring autonomous vehicles (AVs) – and related components, software and services – to market, often collaborating with technology startup companies to develop the underlying hardware or software. As these parties work together to develop technical solutions, the resulting intellectual property (IP) can become a key asset of the automotive supplier, the technology startup company or both. Failure to properly protect and capture IP around technical solutions can impede business goals, as well as delay the development and deployment of AVs.

This article outlines key considerations for automotive suppliers and technology startups to protect their IP.

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Report from OESA Meeting: 2019 Automotive Market Outlook and Connectivity Trends

vehicle manufacturing

Experts warned in late 2018, that they expected to see new light vehicle sales in the U.S. dip for 2019.  A year earlier, many predicted the same sort of decline for 2018 but last year’s numbers proved them wrong.  U.S. sales in 2018 reached 17.3 million, a gain of 0.6% and the fourth biggest year on record.  The 2018 numbers did include some warnings for the year ahead.  In the last three months of 2018 the biggest U.S. automakers saw deliveries fall at a faster rate than for all of 2018.  The early austere predictions for 2019 also factored in expected increases to interest rates, the noticeably high cost of new vehicles, and the robust stock of used cars hitting the market following record leasing back in 2016. Other downward pressures in early 2019 included broad economic uncertainty, most notably exemplified in the government shutdown, falling consumer confidence connected to the volatile stock market in December and January, and increased pessimistic news about the future economic situation.

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New Developments in Conducting Business in Mexico and the Impacts on Automotive Manufacturers

supply chain

NAFTA/Mexico Update

The global automotive industry is experiencing one of the most significant trade shifts in over two decades, specifically the new developments in conducting business in Mexico, including international trade and product safety.

In fall 2018, the United States, Canada, and Mexico reached an agreement to revise the 25-year-old North American Free Trade Agreement (NAFTA). The new agreement, now named the United States-Mexico-Canada Agreement (USMCA), is not expected to take effect until 2020 (at the earliest) as it needs to make its way through the legislative process in each country.

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