For automakers and suppliers, it is no longer enough to achieve excellence in manufacturing, quality and productivity. That's just the price of entry into the vehicle business.
Automakers and suppliers need to understand that the technological and economic changes sweeping through the industry, and the world, are putting the consumer firmly in charge.
So says Jac Nasser, president of Ford Motor Co. He and other speakers at the Automotive News World Congress outlined a future in which life promises to get much more complicated.
Consumers are smarter, Nasser noted. They are still fascinated by cars and trucks, but they have wider interests: movies, computers and software, the Internet. The key, Nasser said, will be for the vehicle business to reinvent and transform itself in order to keep up with its customers.
Just managing the fundamentals would be enough to handle: reducing costs and improving products, preparing for a cyclical downturn, coping with a chaotic global economy - and, everywhere, too much capacity.
All the while, automakers are asking suppliers to take on more engineering and assembly responsibilities. Modular supply, an outgrowth of this push, will sweep the industry, predicted Craig Muhlhauser, president of Visteon Automotive Systems, the Ford parts-making operation. The weak will not survive these demands.
'The rule of the jungle definitely applies to this emerging future,' he said.
The rapid rate of technological change and the unpredictability of economic systems will create new hazards. In the Asia Pacific region, markets that were recently viewed as high-growth opportunities - Korea, for example - are now in disarray, and manufacturers and suppliers are coping with overcapacity.
'We have seen how chronic this problem has become and how it will continue to worsen for at least the next two years, raising the specter of regional blocks and protectionist trade barriers,' said Hyundai Motor Co. Chairman Chung Mong Gyu.
On the technology front, barriers seem to be falling. General Motors, for example, sees new profits in on-board communications, entertainment, safety and security and other services.
GM is planning to expand its OnStar communications service to make it cheaper and simpler to use.
'It's an almost unlimited opportunity to extend our customer business relationships beyond the traditional automotive-related products and services to reach the entire household,' said Ron Zarrella, president of General Motors North America.
The competition is turning into a full sprint. Juergen Schrempp, chairman of DaimlerChrysler AG, said success depends on knowing who the company's customers are and bringing them new ideas before other companies do. Sometimes, he said, that also means knowing what customers do not know yet.