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Posts Tagged ‘Alix Partners’

Automakers Finding Lower Profits in R&D Efforts, Report Says

Increased technology, regulation lowering ROI.

by on Feb.28, 2017

Automakers and suppliers have plowed more money than ever into research and development, but didn't get a great rate of return.

While the auto industry’s investment in research and development has soared in recent years, it generates less profit than it did 10 years ago, according to a new study by Alix Partners.

“The productivity and investment-efficiency improvements that automakers expected from their massive vehicle-platform and modules-based product development don’t seem to have materialized,” the summary of the report noted.

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“Instead, they appear to have been offset by the increased complexity of all the new high technology brought into cars and trucks in recent years,” the report noted. (more…)

Auto Industry to Recover But Woes to Continue

Small cars will represent half of global growth during the next decade, greatly challenging automaker profitability.

by on Aug.06, 2009

John Hoffecker of AlixPartners

Auto industry will rebound in 2013.

The auto industry is passing through a sweeping transition that will see it selling fewer and smaller cars for the foreseeable future, leaving profits squeezed.

John Hoffecker, a managing director of Alix Partners LLP, told the Center for Automotive Research annual Management Briefing Seminar in Traverse City, that sales of new vehicles are likely to recover relatively quickly.

However, sales are very likely to “plateau.” The U.S. market is a growing market but the old sales forecast of around 17 million to 18 million are likely to prove difficult to reach, even though the US population continues to expand and add new households.

“Because of well-known factors earlier this decade, like the housing and stock bubbles, the auto industry skipped what would probably have been a cyclical downturn around 2001 or so, and about 17 million units of sales were ‘pulled ahead,’ Hoffecker said.”

In the last two years, the industry has in turn given back about 7 million units, leaving 10 million units to be foregone before the industry gets back to zero.

“The good news is the indicators we’re looking at say the industry rebound will probably come earlier than some have been, around 2013. The bad news is, when the rebound comes it is quite likely that sales will plateau at 15 million to 16 million per year and that this ‘new normal’ level of demand will last until the peak of the next business cycle,” Hoffecker said.