'Perfect storm' could topple European car giant, industry leaders say

An iconic European car brand will fail in the next three years as the industry faces a “perfect storm” of challenges, according to more than half of surveyed leaders at major car companies.

Trade wars, stricter environmental regulations and Brexit are all forcing manufacturers and suppliers to make major changes. Fifty-five per cent of more than 300 surveyed leaders in a Protolabs report, The Innovation Race, said tougher emission rules are the most pressing short-term concern.

“There appears to be a perfect storm developing in the automotive sector, with trade wars, Brexit and the race to electrification creating a time of extreme change for the car brands and supply chain,” said Bjoern Klaas, managing director of Protolabs Europe.

“With so many challenges to face, it is imperative that the industry continues to invest in R&D and its collective ability to bring innovation to market quickly. And with this report highlighting the unprecedented change expected within the next three years, it’s almost a case of innovate to survive – and then thrive.”

He added: “Nearly 70% of people said they felt under the most pressure of their entire career to innovate, with two-thirds agreeing that without a strong R&D function the business would cease to exist.”

In more positive news, 52% said a new entrant would disrupt the market with a “revolutionary new kind of vehicle” in the next three years. Three-quarters reportedly indicated that they could include customer insight in the early stages of the design process.

The respondents included managers, researchers and engineers from companies around Europe including BMW, Daimler, JLR, Magneti Marelli, Volkswagen and Williams F1.

Companies are keen to innovate, said Klaas. He reported rising demand for Protolabs’ service that helps companies develop parts within 15 days.

He said: “The issue now is that there are so many changes taking place in the automotive sector that even the biggest names are struggling to keep up or aren't confident they have all the answers.

“That’s where outsourcing non-core competencies or tapping into external expertise can be so crucial to gaining that competitive advantage, none more so than in the increasingly digital world manufacturing finds itself in.”