• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » How Supply Chain Finance Can Fund the Future of Automotive

How Supply Chain Finance Can Fund the Future of Automotive

February 8, 2018
SupplyChainBrain

The future of the automotive industry has arrived. Electric vehicles and autonomous driving are fundamentally changing the business models and supply chains of automotive OEMs – and that’s putting many automotive companies in a tough position. How can they profitably meet the demands of today’s consumers while investing heavily in the innovations that will sustain them tomorrow? -Tom Roberts, SVP Global Marketing, PrimeRevenue

Profound transformation is happening across the automotive industry. Revised estimates from Bloomberg New Energy Finance’s global Electric Vehicle Outlook indicate EVs will account for 54 percent of global new car sales by 2040, up from a little over one percent now.

 At the same time, a clear picture of the impact of self-driving vehicles on the industry is finally coming into focus. Accenture estimates OEM sales of fully-autonomous vehicles will reach material volumes by 2025. By 2035, A.T. Kearney predicts, the annual value of the self-driving vehicle market (including the core services that will support it) will be $560bn.

An Industry Upended

Autonomous driving and EVs are redefining conventional business models within the automotive industry. While traditional OEMs are still the carmakers of today, IT leaders like Google and Apple could introduce autonomous systems or even their own vehicles in the not-too-distant future – upending the automotive supply chain as we know it.

A.T. Kearney describes this transformation from a pyramid-like structure to a hub-and-spoke wheel. Historically, OEMs have been responsible for producing vehicles and controlling the customer relationship. In the future, the finished vehicle will be the hub supported by multiple players or “spokes” – the OEM, suppliers, IT providers, telecom companies, etc. Any player, not just the OEM, may influence the customer relationship.

Surviving and Thriving with Supply Chain Finance

To survive these dynamics, today’s automotive OEMs and suppliers must reframe their business for the changes ahead. This requires significant investment in new production capabilities and areas previously dominated by IT giants. It also requires careful examination of the supplier ecosystem to understand which partners are well equipped to handle the roller coaster ahead and which are not.

Most importantly, OEMs and suppliers must have access to sizeable amounts of capital to invest in these innovations, capabilities and new business opportunities. For a growing number of automotive companies, one way is through the implementation of global supply chain finance programs. Currently, supply chain finance programs unlock billions of dollars of capital in automotive supply chains each year.

Backed by multiple sources of funding that span all geographies and currencies, these supply chain finance programs enable automotive companies to extend supplier payment terms to optimize cash flow, while simultaneously allowing their suppliers to get paid early by a funder. Unlike traditional bank lending or factoring, supply chain finance does not increase debt on the company’s balance sheet.

The Outlook

Automotive companies will need to become leaders in innovation and agile business strategy. The availability of investment capital – regardless of current financial performance and market conditions – will play a large role in determining whether companies will survive the transformations ahead. Forward-thinking companies will turn towards supply chain finance to meet liquidity requirements without negatively impacting the financial health of the business.

RELATED CONTENT

RELATED VIDEOS

Supply Chain Finance & Revenue Management Technology Automotive
KEYWORDS Automotive SC Finance & Revenue Management Technology
  • Related Articles

    The Future of the Automotive Supply Chain

    How Supply-Chain Finance Can Help Companies Protect Working Capital

    A Limited View of Value of Supply Chain Finance Can Cost You a Bundle

SupplyChainBrain

Boeing Plans To Cut 2,000 Office Jobs This Year

More from this author

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • A HAND TURNS A LARGE, LIGHTED DIAL WITH THE WORD RISK ON IT iStock-NicoElNino-1364371014.jpg

    Measuring KPIs and KRIs for Comprehensive Supplier Performance Management

    Technology
  • A COMPLEX SERIES OF ROADWAYS AND RAMPS, SEEN FROM HIGH ABOVE, IS PARTLY SHROUDED BY CLOUD

    Supply Chain Visibility Isn’t Just a Catchphrase; It’s an Imperative

    Logistics
  • A TRUCK LEAVES A PORT DOCK LOADED WITH A CONTAINER

    C.H. Robinson Digs in Against Activist Investor Ancora

    Freight Forwarding/Customs Brokerage
  • A WOMAN IN HER LIVING ROOM GESTURES IN DISMAY ON THE PHONE OVER AN OPEN SHIPPING BOX

    Retailers – Quit Bellyaching and Differentiate Yourself on Returns

    Reverse Logistics
  • A CONTAINER SHIP PLIES A SILVERY OCEAN

    CVC Nears Deal to Acquire Logistics Firm Scan Global

    Logistics

Digital Edition

Scb q1 2023 cover

2023 Supply Chain Management Resource Guide: Packing for a Difficult Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing