Automobile manufacturing is an iconic form of American manufacturing that has been an integral part of the economy ever since the invention and popularization of the automobile itself. Today, the automobile industry remains highly important–and the small and medium-sized auto manufacturers now play a more important role than ever.
Of course, like companies in all sectors of manufacturing, automobile manufacturers face unique challenges that they must address in order to create long-lasting success. Here are five in particular that hold special significance for automobile manufacturers.
- Overcapacity. Like all industries, automobile manufacturing experiences ups and downs. Overcapacity is the problem that occurs when a manufacturer has already invested the resources (such as payroll and materials) into building a certain quantity, only to discover later that they do not need to produce as much as they had planned for. The result is an over-expenditure that can damage cash flow and result in waste. The best way to avoid overcapacity is to invest in increased production floor responsiveness and better master production scheduling.
- Sustainability. Consumers are increasingly concerned about sustainability. Manufacturers, therefore, must strive to create more eco-friendly cars and to be more efficient in production.
- Globalization. Increased global competition means lower market prices for many vehicles: once again, most solutions call for increased efficiency in order to offset a lower margin of profit.
- Urbanization. Modern consumers have a different set of criteria for their cars, many of which are related to urbanization. They include smaller vehicles, better maneuverability, and increased fuel mileage,
- Attracting talent. As the automobile industry continues changing, manufacturers will need to continue attracting the best and the brightest talent in order to adapt to the times.