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| John Park, director at AlixPartners, poses in front of the company office in Seoul before an interview with The Korea Times, Thursday. Courtesy of AlixPartners |
By Kim Hyun-bin
Global carmakers are transitioning their lineups swiftly to eco-friendly electric vehicles (EV).
According to a UBS report, the size of the global EV market stood at 3 million vehicles in 2020, but is expected to rise to 35.5 million by 2030.
However, major disruptions are in the works within the automotive industry according to John Park, a director at AlixPartners, with traditional auto parts manufacturers needing to adapt to the changes, shifting from fossil fuels to full electrification in the years to come. With the EV roll-out, original equipment manufacturers (OEMs) will be under pressure to adapt and cut costs further to fund the investments necessary to shift from internal combustion to electric.
“There are concerns for subsidiaries and suppliers in Korea who are very dependent on Hyundai and Kia, as they are lot more mechanical. They are either looking for new acquisitions in extended business lines or they are looking for business opportunities outside the automotive industry,” Park said during an interview with The Korea Times at his office in Seoul, Thursday. “It has not nearly died yet, they still have sizable business and are still making profit with their legacy products. But they know the time will come and they already have begun looking for other business opportunities not necessarily in the automotive industry.”
According to park, automotive industry watchers initially thought OEMs would be more focused towards hardware in the beginning of the EV boom, but they are more skewed towards software and vehicle integration to enhance their competitiveness.
“This is critical ― OEMs see software and vehicle integration core competency in the EV side, as hardware itself could be done by smaller tier 1 companies and suppliers,” he said.
The industry transition makes it crucial to acquire experts in the field to maintain competitiveness in the EV industry. However, carmakers are already struggling to maintain and hire skilled workers especially in the software and engineering sectors.
“The automotive industry is finding it difficult to secure software and engineering talents as IT professionals leave for high-paying jobs elsewhere,” Park said.
Park believes global carmakers’ stock prices have surged due to the EV expectations which have already been reflected in the current companies’ market capitalization.
“Tesla rose by 1,600 percent and even Hyundai went up over 70 percent; the market cap has gone up substantially with high expectations,” the director said. “If the automotive industry fails to live up to the hype it will only negatively impact its market cap.”
Park has more than 20 years of experience in management consulting, helping client companies deal with their strategic and operational challenges. He has an MBA from the University of Michigan and a Master of Science in electrical engineering from Georgia Institute of Technology.
Founded in 1981, AlixPartners is a full-range, results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. It offers consultation services for leading organizations to deliver practical results in business performance improvement, turnaround and restructuring, investigations, disputes and risk management, digital transformation and transformative leadership, according to the company.
[INTERVIEW] ‘EV transition to bring along major disruptions for carmakers’
Source: Buhay Kapa PH
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