#15: My Book "Automotive Transformation"

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The Change in Boundary Conditions of the Automotive Market leads in many cases to a Transformation of the market players. Many Programs have been started by known Players - and many more will be started in the next time. Is there a structured approach - a recipe - to do that?

In 2017 the 4 authors, Helmut Ramsauer , Jan Brecke , Dieter Nazareth and myself published the Book "Transformation von Automobilunternehmen" ISBN: 3744801020 to put our Experiences in a Framework to be used in the upcoming years.

Now, in 2025, our estimation and assumptions about the future development of the Automotive Sector and its need to Transform was - modestly said - allmost completely right.

Motivation

The automotive industry, upon which so much depends in our country and across Europe today, is facing profound market changes. This book was created with the confidence that the traditional automotive companies can transform along with the market and explore new opportunities—provided they create the necessary framework conditions and tackle the changes decisively.

We found very few publications that deal concretely and practically—or, to put it plainly, "hands-on"—with the transformation of automotive companies. How does one actually go about this? Many experts warn that automotive companies must transform. Some even vaguely outline the direction, but few explain how to achieve it.

We aimed to provide practical insights.

Market Trends

Currently, several megatrends dominate the automotive industry. One of the most significant is the social trend toward shared mobility usage, also known as "Mobility-as-a-Service." Alongside this are three technological trends: electric propulsion, autonomous driving, and connected driving. Each of these four trends has the potential to upend the automotive industry—and they will. However, each trend has a different level of impact. The effects of these trends on established companies vary in their "degree of disruption."

The most "disruptive" of these is Mobility-as-a-Service, as it represents a paradigm shift. Ownership of a vehicle is no longer the focus; instead, the emphasis is solely on the desire for mobility. We believe this trend, in particular, will have a profound impact on the product itself—the vehicle—and its manufacturers, ultimately leading to a realignment of the automotive market. The activites has intensified by many players in the last years, like Tesla , Waymo , Mobileye ,MOIA and HOLON .

3 Major Scenarios to be expected

Considering the aforementioned trends, we foresee three possible archetypes for future multi-brand manufacturers in the automotive industry:

1. B2C Vehicle Manufacturer (Business-to-Consumer): The traditional manufacturer model expanded with service offerings
2. B2B Vehicle Manufacturer (Business-to-Business): Focused on producing vehicles for mobility service providers > important in the RoboTaxi market, already in place for some OEMs Mercedes-Benz AG Mercedes-Benz Trucks Toyota Motor Corporation Volkswagen Group
3. Mobility Service Provider: Fully dedicated to mobility applications, currently served e.g. by Uber Flix and for sure the rental car business e.g. SIXT Europcar Hertz

Suppliers are also deeply impacted by this transformation. If a specific technology is no longer in demand, suppliers must also adapt; otherwise, they risk being pushed out of the market.

Our scenario envisioned an international automotive conglomerate where the three archetypes operate as separate divisions managed under a financial holding structure. Shared services (e.g., central IT, HR, facilities, etc.) support all three divisions.

Transformation

Transformation is always a "tailor-made" process for each company and should be grounded in a solid methodology. Broadly, transformation approaches can be categorized into two perspectives:

Top-Down or Bottom-Up: Both ways possible

• Top-Down Approaches: Management-oriented and typically focused on restructuring
• Bottom-Up Approaches: Employee-oriented and systemic in nature

Hybrid approaches, which combine elements of both, have also emerged. These are often referred to as "business transformations."

It is crucial to distinguish between the various levels of methods and understand their capabilities and limitations. Broadly, transformation can be broken into three levels:

• Holistic Business Transformation
• Functional and Change Methods
• Work Techniques

Key Dimensions of Transformation

For decision-makers, digital transformation can often seem abstract, partly due to the overuse of terms like "digital" or "digital transformation." Today, all elements of a transformation are inherently "digital." There is no longer such a thing as a "non-digital" transformation. The key is translating the concept of "digital" into the specific context and goals of the company.

Holistic business transformations typically address the following dimensions:

1. Services and Products
2. Organizational Structure
3. Steering Mechanisms
4. Culture
5. Space

Dimension 1: Services & Products

Over a century ago, Henry Ford shifted automobile production from handcrafted individual vehicles to industrial mass production. Today, many German manufacturers create vehicles tailored to individual customer needs.

However, the fleets of large mobility service providers might reverse this trend. The variety of models could become minimal, with standardized vehicles tailored for fleet use. Drawing parallels from the airline industry, mobility service providers might customize interiors, infotainment, and digital services while sourcing identical vehicle models. This shift would significantly affect the core competencies of traditional B2C manufacturers.

Dimension 2: Organizational Structure

A transformation’s success heavily depends on changes to organizational structure. Many companies initiate exploratory units like innovation labs, startup accelerators, or venture capital arms before starting broader transformations. However, transformation requires a focus on the existing organization—not just innovation hubs.

Dimension 3: Steering Mechanisms

Shifting steering mechanisms and performance metrics is a critical component of transformation. For instance, as mobility service providers, metrics like the number of vehicles sold may lose relevance, replaced by metrics such as:

• Total kilometers traveled using the brand's services.
• Time spent in the brand's fleet vehicles.
• Revenue generated through value-added services in vehicles.
• ...

These new KPIs need to be defined and the Organisation needs an KPI-Orchestration.

Dimension 4: Culture

Cultural transformation involves values, leadership principles, and organizational identity. It demands maximum commitment from top management and widespread engagement across the workforce. Using focus groups, companies can involve employees at all levels in shaping the process. Successful cultural change relies on a clear vision and can take years to fully materialize, with significant shifts becoming apparent only after 5-10 years.

Dimension 5: Space

While often overemphasized in isolation, spatial changes are critical within a holistic transformation. This includes considerations like:

• Location strategies and their associated cultures
• Work environments designed to foster innovation and collaboration

Decisions about space and workplace design should align with the company’s target culture and transformation goals.

Availability & Motivation of Talent defines location of doing business

Conclusion

The automotive industry’s significance for Germany and Europe cannot be overstated. However, the industry is undeniably at a turning point, with trends like electromobility, autonomous driving, connected cars, and Mobility-as-a-Service driving change. These developments are likely to give rise to three new archetypes: B2C manufacturers, B2B manufacturers, and mobility service providers.

We outlined a scenario for the future automotive conglomerate and provided practical guidance on how established companies can navigate this transformation. Key dimensions include services/products, organizational structure, steering mechanisms, culture, and space.

This transformation will challenge even the most successful traditional manufacturers, as long-standing structures lose relevance. A new era of mobility and business operations, characterized by flat hierarchies, agile processes, and cross-industry collaborations, is emerging. However, these changes also present immense opportunities for traditional automotive companies.

Now is the time to begin the transformation. There is no future event or forecast worth waiting for.