Dr. Wilfried Aulbur, senior partner for Roland Berger.Roland Berger
1. What challenges most affected the mobile OEM landscape in 2024?
A key challenge of OEMs in 2024 was by and large a moderation of markets across the globe. The agricultural industry was significantly impacted as the buying bonanza induced by COVID, low interest rates and the war in Ukraine. The construction industry saw moderation in key regions, notably residential in China but also residential in Europe and the US, as homeowners adjusted to higher interest rates and a more difficult economic environment globally. However, continued infrastructure investments driven by national and regional policy initiatives provided support.
Key activities were centered around cost reduction with a focus on both indirect and direct costs. Some of these cost reduction measures also in allied industries such as automotive are putting significant strain on suppliers which creates instability in the supply base as we go into 2025. Remarkably, some industry leaders are pursuing significant double digit cost reduction targets via zero based budgeting approaches and the deployment of new technologies including AI.
2. What are your predictions for the mobile OEM landscape in 2025?
There are many themes that require attention in 2025, however, the increasing presence of Chinese competition in emerging markets as well as Europe is a common theme across passenger cars, commercial vehicles and off-highway vehicles. Chinese players have made significant strides in key technologies such as batteries and smartphone-like user experiences in equipment that resonate with customers.
Combined with a weak market situation at home, an uncertain policy environment and fierce local competition given a high number of players competing with somewhat standardized products, large Chinese players must increase their global presence to the detriment of incumbents. Finding an answer to this competitive threat via improved services, cost-competitive products, and improved internal processes will keep managers busy in 2025 and beyond.
3. In what area(s) do you see the most potential for acceleration or advancement in 2025?
Autonomy is a clear area of focus in 2024 and beyond. Here, improvements have to be made to, for example, not only drive haulage trucks autonomously in a mine, but to optimize worksite productivity holistically. Moving in this direction will enable successful players to capture a large piece of the equipment and service value pools, e.g., via fleet management in mines or construction operations management.
4. What will be the biggest challenge for OEMs and the industry in general in 2025?
Electrification has seen a little bit of a damper during 2024. Going forward, OEMs will have to have electrified solutions in their portfolio to address the needs of cities for zero-emission construction projects or mines for zero-emission haulage trucks.
However, wide-spread application of electrification in off-highway does not seem to be feasible at this point in time and other solutions such as biodiesel or renewable diesel promise a quicker, easier, and cheaper decarbonization of new and existing fleets. This situation drives complexity for engineering departments and as a consequence for the whole organization as several technology pathways need to be pursued independently.
5. What factors should engineers and their companies consider when making decisions in the mobile OEM space in 2025?
Global uncertainty continues to increase. Managing a world that is becoming increasingly regional and less integrated in a time of volatility will require agile yet robust strategies, processes, and culture which leaders need to curate in their organizations. In general, there is strong pull for more sustainable and emissions-lowering technology. If it’s not already a consideration, OEMs would be wise to begin evaluating how it should play a role in their decision-making.
6. What are some of your company's priorities in 2025 with regard to electrification, automation, innovation, emission reduction and/or other emerging trends?
Automation and worksite productivity enhancement will drive our activities as we work with our customers to develop business models around new technologies that work, are profitable and scalable. Risk mitigation and strategies to mitigate a more challenging competitive environment will also be on top of our list combined with structure, efficient approaches to cost reduction and process automation.
