Arthur D. Little: Meeting the Automotive Co2 Challenge: a Case Study from the Automotive Sector
At a time when the environmental impact of carbon emissions, rising fuel costs and "˜greening´ of consumer buying patterns all throw into question the longevity of the traditional automotive manufacturing market, Arthur D. Little looks back on the global oil crisis of 1979 to offer automotive manufacturers strategic advice for addressing this present set of challenges. In a new summary case study, "Meeting the Automotive CO2 Challenge – a case study from the automotive sector", Arthur D. Little looks ahead to a realistic scenario for the car market in 2012, based on past market factors and a strong understanding of developing sustainable business models through innovation and issue leadership.
Auto manufacturers have learned the hard way that trying to predict consumer reactions to new vehicles or technologies can be similar to gazing into a crystal ball. However, years of experience working with automotive manufacturing companies has led Arthur D. Little to believe that the past might offer some hints as to where the consumer is heading. This will give manufacturers the insight they need to develop a strategic framework for tackling the CO2 challenge proactively.
While the public discussion of CO2 emissions often focuses on regulatory trends at national and pan–national level, the study suggests that it is the global cities that are the real pacemakers of regulation in the short term. Changes implemented locally can have a direct and significant influence on consumer buying behaviour.
"Our review has shown that changing consumer behaviour will have a direct impact on the dynamics of the automotive industry," reflects David Lyon, a Senior Manager in Arthur D. Little´s Sustainability & Risk Practice. "Companies with a portfolio consisting of heavyweight vehicles with both low fuel efficiency and a high CO2 footprint are running a very high risk of losing sales. Global mass–market manufacturers such as Toyota and Volkswagen, which have a portfolio of efficient small cars, may also lose 10 "“ 15 per cent of sales volume if they do not actively tackle CO2 at both a technology and business level."
In the first in a series of industry case studies entitled "Carbon INSIGHTS," Arthur D. Little suggests that rather than focusing solely on technological solutions to the CO2 challenge, OEMs need to adopt a broader approach and develop a strategic framework for tackling the CO2 challenge proactively.
Critically, there are lessons to be learned from the OEM sector:
- Maintain balance of performance (e.g. low carbon technologies) and perception (e.g. green branding) "“ and ensure they match
- Consider how carbon and other sustainable development issues will affect different products across your portfolio
- Don´t miss the "˜local´ drivers for new low carbon products/services (e.g. regulations in cities "“ like the London Low Emissions Zone)
"Meeting the Automotive CO2 Challenge – a case study from the automotive sector" is now available for download at http://www.adlittle.com/reports.html?&no_cache=1&view=157
About Arthur D. Little
Arthur D. Little, founded in 1886, is a global leader in management consultancy, linking strategy, innovation and technology with deep industry knowledge. We offer our clients sustainable solutions to their most complex business problems. Arthur D. Little has a collaborative client engagement style, exceptional people and a firm–wide commitment to quality and integrity. The firm has over 30 offices worldwide. With its partner Altran Technologies, Arthur D. Little has access to a network of over 16,000 professionals. Arthur D. Little is proud to serve many of the Fortune 100 companies globally, in addition to many other leading firms and public sector organizations. For further information please visit www.adl.com