Business / Auto China

Auto industry gets geared up for expected tech revolution

By Li Fangfang (China Daily) Updated: 2014-07-07 07:09

Nearly half of the interviewed automotive CEOs - about 45 percent - said they planned to increase numbers of employees, so there is a strong need to attract top talent. In addition, 91 percent of the CEOs said they saw a need to adapt their talent strategy in response to global trends.

Tom Linebarger, chairman and CEO of Cummins Inc, said he believed it was critical to develop local talent bases.

"In China, Cummins has more than 9,000 employees, with only about 40 expatriates, and the leadership team is, all but one, local Chinese," said Linebarger.

"We need to have a face that's local, that understands what customers want and is able to access technology and trends from that market, so, as those emerging markets grow, Cummins has the opportunity to grow with them."

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The majority of automotive CEOs said they saw a need to adapt their supply chains and 20 percent had already started or completed change programs. More than half of them were somewhat or very concerned about supply chain disruption being a potential business threat.

As a result, CEOs have focused on improving regional supply-chain and logistics strategies to create an efficient flow of resources and products, including building where their customers are.

For example, China, the world's largest new vehicle market, ranked highest on the list of countries automotive CEOs considered important for overall growth prospects, followed by the United States.

"This year China once again ranked number one on the list of countries automotive CEOs consider important for their overall growth prospects," said Wilson Liu, PwC China automotive leader.

"In response, OEMs (original equipment manufacturers) and suppliers are rethinking their manufacturing and distribution strategies. Being close to customers can help offset the impact of a potential disruption," he said.

"As a result, China will become a popular destination in the next decade for global OEMs to build up their manufacturing plants, research and development centers and even regional headquarters."

Changing market dynamics and advancements in technology influences the need to invest in building infrastructure in new cities and replacing or updating infrastructure in older cities.

Automotive CEOs are aware of the challenge and 57 percent said they were concerned that inadequate basic infrastructure could threaten growth, compared to 47 percent of CEOs overall.

"Change is here and leading companies are closely evaluating every aspect of their business," said Hanna.

"Today's automotive CEOs should understand the issues at hand and address them on a much larger scale. In order have transformational growth, CEOs are taking these challenges and turning them into opportunities."

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