Rethinking the risk landscape of automotive manufacturing
The pace of change within the automotive sector is unprecedented, where modern vehicles are viewed as ‘computers on wheels’ as much as they are machines.
Innovation within software and electronics applications enable vehicles to predict, identify and avoid potential collisions. With over 30,000 individual components in vehicles rolling off factory floors today, the level of integration is unprecedented.
But what happens when one of these products fail? In addition to managing the rapid evolution of electrification, automation and connectivity, manufacturers must also address new contractual roles and responsibilities, while preparing for potential liabilities arising from unforeseen technological defects.
“In addition to managing the rapid evolution of electrification, automation and connectivity, manufacturers must also address new contractual roles and responsibilities, while preparing for potential liabilities arising from unforeseen technological defects.
Ben MacCarthy | Head of Casualty, Asia & Head of Real Estate, Hospitality & Leisure, Asia
At this time of great risk – and opportunity – we surveyed 500 leading companies around the world, to find out how they see the industry developing. This includes original equipment manufacturers (OEMs) and component manufacturers, to highlight the unique challenges encountered at different stages of the supply chain.
We found that, businesses are broadly optimistic about the future, despite various headwinds. With global conflicts and trade tensions on the rise, ESG requirements and regulations becoming more onerous, and the risks associated with software and autonomy yet to be fully understood, the sector faces a number of new challenges.
Companies are increasingly dependent on third party software and more enabled by the benefits it brings, such as leveraging technology to identify defects earlier, before they become critical. But, as we move into an era of highly computerised, hyper-connected vehicles, few are sure where the liability for faults will begin and end.
Our survey was carried out for us by Coleman Parkes research agency in Autumn 2023 using a mixture of phone interviews and web-based survey forms.
We received 500 responses from senior decision makers within leading automotive component manufacturers and OEMs in more than 20 countries across Europe and Middle East, North America, Asia-Pacific and Latin America.
Embarking on this report will offer invaluable insights into the dynamic landscape of risk management within the automotive sector. The analysis goes beyond surface-level observations to uncover the evolving significance of risk management practices, shedding light on the contemporary challenges and opportunities inherent in automotive manufacturing and distribution.
Here's a glimpse of what you can anticipate discovering:
Understanding emerging risks: Explore the unprecedented transformation underway in the automotive sector and the associated challenges, including electrification, automation and connectivity.
Navigating strategic objectives: Discover key strategic objectives identified by industry leaders, such as liquidity management and adapting to evolving ESG requirements.
Insights into technology trends: Gain insights into the role of automation, software, and digitalization in modern vehicles, along with associated risks like cyber threats and software compatibility issues.
Exploring alternative energy solutions: Learn about the potential of alternative fuels like hydrogen and the barriers to widespread adoption of electric vehicles.
Addressing supply chain challenges: Understand the impact of supply chain disruptions and geopolitical uncertainties, along with strategies like nearshoring and supplier approval processes.
Clarifying contractual responsibilities: Explore the complexities of contractual obligations and liability for product defects, particularly in the context of software failures.
Enhancing risk management and insurance practices: Discover best practices for risk management and insurance coverage, including the importance of identifying coverage gaps for emerging risks.
For specialist guidance in discovering smarter ways to manage your risks in the automotive sector, reach out to us today.
