The CEO of major automotive supplier Magna International said Tuesday the industry needs to get more flexible and earlier.
“There is no single future,” Magna chief Swamy Kotagiri said at an Automotive Press Association presentation at Magna’s complex in the Detroit suburb Troy, Michigan. “Companies are being asked to do a lot of things at once.”
Automakers and major suppliers must be ready for shifts. He cited how the shift to electric vehicles varies across regions.
China is pushing for more EVs. Meanwhile, fervor for EVs in the U.S. markets has cooled under the administration of President Donald Trump. Europe is somewhere in the middle.
With EVs, Kotagiri said, “the pace and path are not uniform” in various markets.
At the same time, the war between the U.S. and Iran, which began on Feb. 28, have boosted oil prices, making traditional internal combustion vehicles more expensive to operate.
In turn, there’s more uncertainty afflicting the auto industry. Automakers and their major suppliers are dealing with more issues.
“Flexibility is a competitive advantage,” the executive said. “This industry has to operate differently.”
The Magna CEO said automakers and suppliers must find ways to simplify production sooner in the design phase to cut costs. Chinese automakers are reducing the time to develop new vehicles.
“Complexity must be designed out,” he said. Companies, he said, must “eliminate complexity up front.”
Magna is based in Canada while having 327 factories and 100 product development centers in 28 countries.
The CEO said the industry is under pressure from investors.
“Capital demands clarity,” he said. “Companies have to be very clear” about their goals and plans.
