Top Challenges Facing the Automotive Industry

The automotive industry includes industries associated with the production, wholesaling, retailing, and maintenance of motor vehicles. It has seen tremendous growth and changes over the last decade, and those changes have presented many new challenges to manufacturers and suppliers alike. Challenges stemming from both economic and environmental factors have changed the way vehicles must perform, and automotive manufacturers have been required to take measures to adapt to them. The coming years are likely to see the adoption of new technologies, increased competition from non-traditional players, and an increasing focus on quality assurance and customer service. This article explores these challenges in more detail, along with possible solutions to help manufacturers overcome them.

Attracting Talent to the Industry

Loss of labor is one of the top challenges that industries have to face due to this pandemic. Many businesses in the automotive industry had to cut down thousands of jobs due to mass layoffs brought about by manufacturing shutdowns and reduced sales.

Technology and innovation continue to drive the automotive industry. Emerging technology is changing the automotive industry and how drivers get from point A to point B. The demand for knowledge about emerging technologies and how they’ll impact the automotive industry in the future will only continue to grow. Competency in information technology and STEM skills are necessary, and currently hard to find, in all industries. To attract talent who can tackle these challenges, employers need to focus on training and educational strategies as well as developing a diverse workforce with new ways of thinking. 

The first step in attracting talent is competency management. A workforce equipped with the skills necessary to meet changing demands will lead to higher levels of company success and customer satisfaction. Today’s car buyers want more than just products that work well; they want products that can be personalized to their needs. The most successful auto brands will use this insight as a guide for delivering product and service innovations that will help make buying decisions easier for customers today.

Data Management

Another challenge in the automotive industry is competence and data management. In today’s world, data-driven decisions are crucial to success. As OEMs come up with innovative autonomous models, data management systems’ analytics will become more prominent. The demand for connected automobiles has increased as technologies in the automotive sector have advanced. The need for data management systems to analyze and gain user behavior, as well as analyze and understand customer needs has also increased. Previously limited to marketing and sales, data analytics is now being used in product development, industrial processes, logistics, and aftermarket solutions. 

One common mistake companies make is underestimating how much data they will need to store or process per day and subsequently upgrading storage or infrastructure facilities after the fact to provide necessary space. The problem with this is that it increases costs because they have had to hire more staff or buy more equipment without having any insight into what their needs would actually be. To avoid this situation, businesses should start with a clear idea of what their needs are before committing to anything else by analyzing historical data on things like production volume and then estimating future growth rates.  

With Competency Management, organizations can demonstrate technical capabilities in creating business intelligence solutions and show proficiency in connecting data sources, performing data transformations, and modeling and visualizing data. 

Regulatory Adherence

As the automotive industry changes, so do the safety and regulatory requirements. Companies now need to adopt new technologies and programs in order to stay in compliance with these standards, which puts increased demand on the organizations’ ability to staff accordingly. Employees that work on the production line need specialized skill sets to help with assembly, data entry, programming, etc., while management needs specialized skill sets like project management and financial forecasting. These competencies are not necessarily unique to the auto industry, but companies have found it difficult to find qualified individuals who can fill open positions quickly enough. The lack of experience is leading some businesses to look outside of their sector for talent, a trend that may become more common as tech companies increasingly collaborate with automakers.

Automotive Industry Competency

Here are a few of the most prevalent automotive industry standards that require compliance in the automotive industry:

IATF 16949:2016 is a new standard that will help companies get recognized as world-class automotive suppliers.  It integrates well with other management system standards and will bring quality and continual improvement to the heart of the organization.  It was developed and is operated by the International Automotive Task Force (IATF) to create common processes and procedures across the industry.  Certification to IATF 16949:2016 is a requirement throughout much of the automotive supply chain.

IATF 16949 isn’t designed to be a self-sufficient quality standard but instead works best in conjunction with a comprehensive QMS, therefore ISO 9001 certification makes sense for automotive companies looking to demonstrate improvement in customer satisfaction, operating costs, stakeholder relationships, legal compliance, risk management, business credentials and attracting new business.

ISO 14001 is the primary EMS certification for more than 250,000 organizations around the world. It is the global standard for any business that wants to manage and control all aspects of its environmental impact. ISO 14001 certification is a proven way to demonstrate that you’re serious about your business’s environmental and economic sustainability.

ISO 45001 provides businesses with a framework for controlling and eliminating factors that can lead to illness, injuries, and death. It demonstrates brand responsibility by committing to safe, healthy, and sustainable work. This standard is flexible and can be adapted to manage occupational health and safety and suits a wide range of organizations.

Environmental Protection

While the auto industry is unequivocally profitable, its products are responsible for an enormous amount of the dangerous emissions contributing to global warming. Car manufacturers are looking for solutions that are feasible and cost-effective, as well as sustainable. They must consider powertrain solutions that reduce carbon emissions, and how to measure the carbon footprint in order to ensure that the industry is complying with the safety regulations and measures in place. The industry needs to consider what skills and expertise are needed in order to implement these solutions.  

Competency Software Management Systems 

The challenges in the automotive industry provide an opportunity for companies to rethink their strategies and embrace change and innovation. The industry is constantly evolving and businesses need to keep up with the latest trends and adapt quickly to the changes in the market. 

One important innovation for competency management that helps organizations adapt quickly to shifting demand is automated competency management software. This type of software manages workloads by assessing job applicants against the necessary competencies and tailoring training programs accordingly. Additionally, because the system gathers data about an individual’s experience, it can anticipate skill shortages before they happen and make adjustments in advance.

CABEM Competency Manager is a Competency-based Training and Credentialing solution that inspires professional development and mitigates compliance risk. Users can create learning and development activities and documentation requests directly in Competency Manager, or integrate it with your existing LMS. Adhere to ISO, OSHA, and other regulations with document tracking and archived training materials. Competency Manager also allows organizations to quickly determine the status of a vendor employee’s access compliance.

Everyone has many tasks that they need to accomplish, and desired skills to be able to do so competently. CABEM’s Competency Manager helps bridge this gap by compiling and creating competencies in a logical way that will institutionalize enterprise employee knowledge. It allows organizations to create competencies and map them to departments, roles, locations, and other segments across the enterprise. Contact us today to get started.