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U.S. Auto Industry at Risk Asserts Blunt Report from Executive Conference
A recent executive conference report has sounded the alarm for the US auto industry, warning that it is at risk of being left behind by Chinese automakers and electric vehicle startups unless drastic changes are made. The report highlights significant gaps in innovation, competitiveness, and government support between the US and China.
According to the study, the Detroit Three have lost 6.6% points of global market share to their Chinese counterparts, equivalent to about 5.6 million units of capacity and tens of thousands of jobs. This decline is attributed to an inability to adapt to changing market conditions and a failure to innovate in response to emerging technologies.
One of the key observations made by the report is that legacy automakers are still clinging to outdated engineering practices. For instance, some manufacturers continue to build structural beams inside instrument panels using specifications designed for cars with internal combustion engines, which add unnecessary cost and weight to electric vehicles.
The report urges the industry to “unlearn old engineering priorities” and adopt more efficient and innovative approaches, such as those employed by companies like Tesla and Rivian. It also highlights the importance of China’s willingness to take calculated risks in production and not worry about making perfect designs from the start.
Another critical takeaway is that the US auto industry lacks sufficient political influence. The report notes that only three out of 16 automotive manufacturers operating in the US have their own Political Action Committee, hindering their ability to effectively advocate for their interests at the government level.
The paper concludes by emphasizing the urgent need for a new strategy and a call to action for the industry to begin formulating smart policies.
Source: www.forbes.com
