Automotive

The road to success

The Automotive Competence Center (ACC) works with leading light and commercial vehicle manufacturers, automotive distributors and retailers, as well as automotive suppliers and automotive service providers around the globe.

In close cooperation with our clients, we solve a wide range of strategic issues and operational problems at every stage of the automotive industry value chain. Our teams develop strategies for new products and markets, adapt organizational structures, guide our clients through post-merger integration and help realize innovative cost-cutting concepts. We develop creative strategies and implement practical solutions, always aiming to exceed our clients' expectations.

The ACC is one of the largest industry Competence Centers of Roland Berger. Our teams consist of highly talented individuals, whose industry and consulting experience guarantees that we can generate tangible value for our clients. Over 700 successful projects in the past decade have made us a leading player in the automotive consulting arena.

In China

Despite a strong growth market since entering the WTO, the Chinese automotive industry is facing serious issues with over-capacity and low productivity. The shift in the macro environment has also brought changes to the industrial competitive landscape evidenced by price wars, surging numbers of new car models, and cost pressures on car makers and suppliers.

With its market size and growth potential, China has become a key market that any leading automotive OEM cannot afford to neglect. Yet a large gap exists between domestic players and leading global players in terms of scale, core technology and management capabilities. Being the leading global consulting company for the automotive industry, Roland Berger Greater China has served more than 20 key players in the automotive industry through 60 projects during the past 3 years in the areas of:

• Corporate strategies through market and competitive environment assessment
• New product launch plan
• Brand positioning and architecture
• Global and regional sourcing strategy and implementation
• Supply chain optimization and logistics management
• Organizational restructuring

Our project examples:

Client Issues

The awesome growth of China bus market and its future potential attracted more and more new entries. After China's entry into WTO, global players are more than eager to expand into China market. At the same time, the high profitability also lures many domestic automobile companies, even the motorcycle companies, into the market. As a result, the market competition kept upgrading, and industry average profit level was slipping. From demand perspective, customers were more and more favor of customized solution, which posted great challenge on technology advancement. Living in such a tough market, our client was eager to develop a winning strategy in order to maintain current leading position and improve investment return.

Project Approach

Leveraging the insight of China automotive market as well as industry know-how of Automotive Competence Center, the project team translated the client issue into clear project objectives, which was to design future business portfolio, to develop growth strategy for core business and to provide client with methodologies on establishing its core competence.

Firstly, the team worked closely with client to study the financial performance of current business units, growth potential of relevant markets and the company's competitive position through interviews, financial analysis and benchmarking. The team also analyzed the potential new business areas and compare the success factors with company's own resources and current competitive advantage. Integrating all the result, the team finally developed corporate strategy and business plan, and also defined the core competences that the company needed to obtain for strategy implementation.

Secondly, the team assessed quantitatively the profitability, market size, competitive situation of every segment within the bus market, and developed key recommendation on growth strategy for client's core business.

Thirdly, with the overall strategy in place, the team went on to develop branding strategy, in which brand architecture, inter-relationship between different level of brands and positioning of each brand were clearly defined. Last but not least, to assist client in its endeavor to establish core competences, the team reengineered the new product development and brand management process to improve efficiency and speed up reaction to demand. And the team also provided the client with tools and methodologies in marketing management.

Impact

The client bought in and implemented our recommendations. Through joint venture and organic growth, diversified business portfolio was successfully carved out, and distinctive growth strategy was employed for core business, strategic business, emerging business and opportunistic business. For the core business, the client managed to maintain its leading position, and beat the financial targets. Marketing capabilities were enhanced, and the reputation of core business brand was upgraded with successful communication of its revised value proposition.

Client Issues

Spurred by the blowout of the sedan consumption in China, the market quickly expanded and soon evolved to be more and more sophisticated. Brand image became one of the key decision factors in consumer purchasing process. Therefore, many international auto giants, including our client, all beefed up their investment in branding in order to set themselves apart from competition. Over the years, our client had built up an powerful mother brand under which there were several successful car models competing in different segment market. Going forward, the company intended to roll out new models and expanded into new segment market.

As a result, current mother brand was no longer able to accommodate the future product line extension, and the overall brand architecture might not fit with the business growth any more. New brand strategy was badly needed and should be well integrated into marketing operation. As an expert in branding and marketing, Roland Berger Strategy Consultants was asked to help with the tough job.

Project Approach

To provide our client with the best quality service, the project team was formed with experts from Automotive Competence Center and Sales & Marketing Competence Center. The team first utilized our unique brand analysis tool, Profiler, and conducted consumer survey to study the positioning of competing brands as well as their differentiation points. Through various methods such as interviews and on-site observation, the team then studied the performance of competing brands in pricing, channel distribution, product design and promotion, and understood detailed value proposition of every competing brand.

Based on the brand audit results, the team conducted SWOT analysis on client's brand versus competing ones, and generalized the future positioning opportunities and forecasted potential risks. Integrating all the results into solid conclusion, the team finally developed key recommendation on brand strategy, in which the overall brand architecture, positioning of mother brand, inter-relationship between umbrella brand and product brands, and differentiating positioning of every product brand in relevant segment market were clearly defined. To ensure our client understand the project deliverables and have good plan to implement them, the team assisted the client in determining department responsibilities in multi-brand management, and also provided useful tools and methods such as marketing performance evaluation.

Impact

This project equipped our client with a clear picture of future brand architecture as well as the implementation road map. The positioning of mother brand was carried out in the marketing operation, and some value proposition was emphasized to enable the endorsement to the product brand underneath. As a result, the following launch of a new product brand was completed with great success.

Contact

Shen Jun
Partner, Head of Automotive Competence Center