Home / Motor/ Auto makers are feeling the pull of ‘digital gravity’ in a rapidly changing industry

Auto makers are feeling the pull of ‘digital gravity’ in a rapidly changing industry

Comments / {{hitsCtrl.values.hits}} Views / Monday, 29 April 2019 00:00



  • KPMG and Egon Zehnder release a global mindset study on the status quo of digitalisation in the automotive industry
  • While awareness is high, mindset and openness to approaching truly new paths are low

NEW YORK/BERLIN/SHANGHAI: Awareness of digitalisation is high and change initiatives are numerous in the automotive industry. Yet on a strategic and cultural level, change is hardly taking place, claims a joint global automotive study by KPMG and Egon Zehnder.

The survey, which interviewed 527 auto executives from around the world, determines that most automotive companies are not prepared for the digital shift disrupting the industry. Stalling at the executive level prevents a deeper transformation journey which includes organisational alignment. Largescale change is not possible without a tech-first mindset shift.

Major survey results include:


  • While 92% of respondents are convinced that a new and different cultural approach is imperative, only 29% regard building a ‘fail first, fail fast’ environment as a guiding principle for such a new culture, and only 34% consider fewer hierarchies appropriate. Most respondents (55%) openly admit that their company has not defined a new cultural approach at all.
  • A majority say the necessary prerequisites for digitalisation are “process changes” (57%). Cultural changes and leadership awareness are ranked lowest. Also, when asked about usage of AI and other digitalisation technologies, almost 50% reveal their strategy is to be an early follower. Only 40% want to be first movers.
  • A majority claim that the main driver of digitalisation comprises cooperation models with players from their own industry. Also, 66% say that traditional and new business models need to run “side by side” while only 34% believe in a “complete shift of business models and products with a clear awareness that the return of new businesses can still be negative today.”

KPMG and Egon Zehnder liken the results of the survey to the realisation of scientists that the sun is at the centre of our solar system. Understanding the power of digitalisation in the auto industry presents the same reordering of the industry as we know it. 

KPMG International Global and European Head of Automotive Dieter Becker said, “Our survey clearly demonstrates that the industry is caught up in its traditional ‘product optimisation’/tech mindset and its ‘I can do it all on my own’ approach. What is lacking is a clear and revolutionary vision and bold moves toward new and digital partnerships with the expectation that cooperation will positively influence the automotive industry. We are entering a time where cultural hires and Diverse Network Families are truly a ‘must’ for the industry moving forward.”

Egon Zehnder Global Head of Automotive Practice Christian Rosen calls for a humble leadership that “empowers a new culture bridging the gap between traditional and digital expertise. While the industry knows that Digital Gravity clearly dominates the future, it has to understand how to unleash – via new talent and a culture of self-invention – the creative power needed for the future.” Rosen also calls for a focused initial approach. “Many things are working excellently and will stay. Many people focus on too many areas at the same time instead of strategically identifying those areas in which digital transformation has to start.”

Both parties praised the high degree of awareness and alert that are documented in the entire survey. They also acknowledge that while new players have the advantage of playing only the new cards, the classical industry needs to “change wheels while driving.” In the words of Dieter Becker from KPMG, this is “not necessarily a disadvantage, but in fact can be turned into a winning factor.” “In the end,” adds Christian Rosen from Egon Zehnder, “those players who can perfectly navigate Digital Gravity and high-class production will win the battle in the mobility sector.”

Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

A case for reviewing plantation management

Thursday, 23 May 2019

Last week, I elaborated on ‘Going Beyond Agronomic Research for Plantation Reform’ with the aim of beginning a conversation on the importance of non-agronomic research to understand the many problematic areas that plague the plantation sector, in

How are we doing in e-government?

Thursday, 23 May 2019

It is customary to assess some aspect of the performance of a country using a composite index such as the Ease of Doing Business Index or the Network Readiness Index. For government services, there is the e-Government Development Index (EGDI), issued

National introspection in the aftermath

Thursday, 23 May 2019

“The immediate task for the Government is to guaranty the safety and security of all innocent Muslims and prevent a recurrence of 1983 … One cannot eradicate one evil with another” – Anatomy of an Islamist Infamy (III), CT, 9 May. In this, th

AI + BI + CI x DI = Empowering, enriching and impacting society and environmental wellbeing

Thursday, 23 May 2019

There has never been a time like today where many are raising concerns for society’s wellbeing, survival and thriving, despite many progressive advancements in the digitally transformed world. We are already in the so-called Fourth Industrial Revo

Columnists More