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ive success principles from concept to execution

The launch of new products, new plants and new production lines has always been a critical challenge for auto companies and their suppliers. For e-mobility production, where product and process complexity are greater, this challenge becomes even more acute. So, how can companies bake in success?

At Berylls we have hands-on e-mobility production experience all the way from concept to wheels on the road. As always, we think holistically and help manufacturers to do the same, developing infrastructure and deploying both teams and capital machinery with an end-to-end worldview.

But this is the real world and things can and will go wrong. We have learned that beginning with an understanding of the most common points of failure in an e-mobility manufacturing project means success becomes the likely outcome. Experience tells us that there are five common pitfalls in e-mobility manufacturing development that can be turned into success factors.

Authors

Dr. Ralf Walker

Partner

ralf.walker@berylls.com

Fritz Metzger

Associate Partner

fritz.metzger@berylls.com

Peter Trögel

Associate Partner

peter.troegel@berylls.com

FACTOR ONE: Design for Production Complexity

E-mobility production is characterized by high complexity. Compared to conventional automotive manufacturing, any one value stream will comprise more components and more process steps. This means the production blueprint needs to be defined in exhaustive detail. Machine specifications and capabilities are critical: quality demands are exceptionally high. And process resilience needs to be designed in, so the production chain can be de-coupled when needed without freezing the entire production process.

You have one shot at success, right at the start.

FACTOR TWO: E-mobility is Hyper-Sensitive to ‘Technical Cleanliness’

Technical cleanliness is a measure of particulate and other potential contaminants in the production process, usually as defined by the VDA 19 process standard. It sounds routine and that is why it can be underrated. But you cannot afford to underestimate it in e-mobility production. Manufacturers must understand customer demands and cleanliness standards and run them all the way back through the supply chain. Every team member must develop this quality awareness and testing technology must be fully enabled.

There is no endpoint for technical cleanliness: improvement must be continuous.

FACTOR THREE: Step Up Project and Partner Management

Pre-determined KPIs for machine performance do not self-actuate: they must be tracked continuously and rolling performance communicated with all stakeholders including suppliers and users. Teams must be KPI-aware and empowered to intervene immediately whenever necessary.

Missed KPIs mean delayed launches and spiraling costs.

FACTOR FOUR: Feedback is Critical

Operational readiness is not a fixed quality: it depends on rapid feedback from the shop floor and rapid response from decision-makers. That means active involvement from executive managers onsite, from day one. Daily alignment meetings based on feedback as close as possible to real-time are necessary.

Feedback has a short half-life: don’t let it decay.

FACTOR FIVE: Integrate the Customer

In e-mobility customer requirements can evolve fast. Responding fast means a common understanding of technical feasibilities that allow all stakeholders to understand – but also challenge – requirements as needed. Involving the customer from the beginning and communicating transparently is key here.

More than before, be customer-centric from shop floor to boardroom

KEY ELEMENTES FOR A SAFE CELL LAUNCH

A successful and safe cell launch consists of several elements – Technical Cleanliness is just one ingredient.
Cell suppliers need to “juggle all balls” at the same time while facing ambitious capacity expansions.

The advantage of end-to-end is clear: get it right at the beginning and you are set to get it right all the way through.

This means following a holistic framework from the conceptual basics, to identifying the best possible plant location and defining the production blueprint, and on to building the required capabilities for a successful launch. Whether you are a newcomer to the automotive industry (and in e-mobility there are many) or an established automaker, the end-to-end mindset is key to successful collaboration with stakeholders through every stage of product and process development.

It may seem obvious to say it, but the foundation for successful execution is a strong project management office tasked with coordination: that means coordinating risk analysis and mitigation, time planning, and KPI and measure tracking across all workstreams.

This is end-to-end in practice. From shop floor to the boardroom and back again.

Fritz Metzger

Fritz Metzger (1986) joined Berylls by AlixPartners (formerly Berylls Strategy Advisors), an international strategy consultancy specializing in the automotive industry, in February 2021. He is an expert on automotive operations.

Since 2011, his focus has been on strategic alignment and operational efficiency improvement of automotive manufacturers and suppliers. He also advises top management in critical situations, including R&D and industrialization task forces and relocation and restructuring initiatives of plants and complete suppliers. The challenges of e-mobility are always in focus.

Before joining Berylls, he was a director at international strategy consultants PwC Strategy&, as well as a sales and project manager at a medium-sized supplier and mechanical engineering company.

Fritz Metzger is a trained industrial engineer with a degree from ESB Business School Reutlingen. He also holds an MBA from the University of Salzburg.

Dr. Ralf Walker

Dr Ralf Walker (1969) has been a partner at Berylls by AlixPartners (formerly Berylls Strategy Advisors), an international strategy consultancy specialising in the automotive industry, since September 2021. His expertise lies in the areas of operations and task forces.
He has been advising automotive manufacturers and suppliers in a global context since 2008. He also has in-depth expertise in the areas of launch & ramp-up management, turnaround management, production & supply chain optimisation, lean management and strategy development & footprint optimisation.
Before joining Berylls Strategy Advisors, he spent 18 years at PwC Strategy&, Booz & Co, Management Engineers and the Fraunhofer IPT, as well as 5 years at GKN as head of the European team and member of the global team for the introduction of lean and business excellence principles, production manager and head of industrial engineering.
He studied mechanical engineering at RWTH Aachen University and completed his doctorate at the Fraunhofer IPT in Aachen.

p to 160 BEV launches per year are expected globally soon. But as our project experiences and latest press releases show, automotive OEMs and suppliers struggle to launch and scale up electric vehicle production already today.

Read below how industry players can meet the increasingly complex development and production to master future e-mobility launches, which requires to handle a dynamically changing environment combining the two worlds of hardware and software.

Are you up for the challenges ahead?

Berylls Insight

Ramp-up Excellence: How can OEMs and Suppliers master E-Mobility launches?

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Autoren

Heiko Weber

Partner

heiko.weber@berylls.com

Fritz Metzger

Associate Partner

fritz.metzger@berylls.com

Christian Grimmelt

Associate Partner

christian.grimmelt@berylls.com

Heiko Weber

Heiko Weber (1972), Partner at Berylls by AlixPartners (formerly Berylls Strategy Advisors), is an automotive expert in operations.

He started his career at the former DaimlerChrysler AG, where he worked for seven years and was most recently responsible for quality assurance and production of an engine line. Since moving to Management Engineers in 2006, he has been contributing his experience and expertise to projects for automotive manufacturers as well as suppliers in development, purchasing, production and supply chain. Heiko Weber has extensive experience in the development of functional strategies in these areas and also possesses the operational management expertise to promptly catch critical situations in the supply chain through task force operations or to prevent them from occurring in the first place.

As a partner of Management Engineers, he accompanied the firm’s integration first into Booz & Co. and later into PwC Strategy&, where he was most recently responsible for the European automotive business until 2020.

Weber holds a degree in industrial engineering from the Technical University of Berlin and completed semesters abroad at Dublin City University in Marketing and Languages.

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Fritz Metzger

Before joining Berylls, he was a director at international strategy consultants PwC Strategy&, as well as a sales and project manager at a medium-sized supplier and mechanical engineering company.

Fritz Metzger is a trained industrial engineer with a degree from ESB Business School Reutlingen. He also holds an MBA from the University of Salzburg.

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Christian Grimmelt

Christian Grimmelt has been an integral member of the Berylls by AlixPartners (formerly Berylls Strategy Advisors) team since February 2021. Previously, he gained extensive professional experience in top management consultancies and in the automotive supplier industry.

During his time at the world’s largest automotive supplier, he drove the establishment of a central unit to optimize the company’s global logistics and production network.

Christian Grimmelt’s consulting focus is logistics and production network optimization, purchasing and (digital) operations including launch and turnaround management for OEMs and especially suppliers.

Christian Grimmelt holds a university diploma in industrial engineering from the Karlsruhe Institute of Technology.

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n unstable times, choosing the right supplier gives certainty and cuts costs.

Fact-based approach to supplier selection helps OEMs avoid delays and cost overruns as they ramp up ev production and work with less experienced suppliers.

The current state of flux all along the automotive value chain makes assessing and choosing the right suppliers extremely difficult. Taking a fact-based approach helps OEMs avoid delays and cost overruns.

Berylls Insight

Supplier Selection in unstable times

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Autoren

Timo Kronen

Partner

timo.kronen@berylls.com

Christian Grimmelt

Associate Partner

christian.grimmelt@berylls.com

Valentin Froh

Project Manager

valentin.froh@berylls.com

Timo Kronen

Timo Kronen (1979) is partner at Berylls by AlixPartners (formerly Berylls Strategy Advisors) with focus on operations. He brings 19 years of industry and consulting experience in the automotive industry. His focus is on production, development and purchasing as well as supplier management. Some of his recent projects include:
• Restructuring of the Procurement Function (German Sports Car OEM)
• Supplier Task Force for a HV battery cell (German Premium OEM)
• Strategy Development for the Component Production (German Premium OEM)
Before joining Berylls, Timo Kronen worked at PwC Strategy&, Porsche Consulting Group and Dr. Ing. h.c. F. Porsche AG. He holds a diploma degree in industrial engineering from the Karlsruhe Institute of Technology (KIT).

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Christian Grimmelt

During his time at the world’s largest automotive supplier, he drove the establishment of a central unit to optimize the company’s global logistics and production network.

Christian Grimmelt holds a university diploma in industrial engineering from the Karlsruhe Institute of Technology.

Kontakt Über Berylls

hy the new market entrants can only gain sales traction in a well-functioning ecosystem with the right partners

This is the third and final article in our short series that focuses on the performance of Chinese OEMs (old and new) in Europe. Following the previous article, we take a hard look at the ecosystem around market entrants from China and what needs to be put in place for a successful rollout.

In our previous article, we listed the difficulties for Chinese OEMs to enter the Western European market. We also pointed out market entry strategy directions in terms of short-term, mid-term, and long-term planning.

Within this article, we would like to talk about how to take the first steps into the mature European market. How to conduct the entry comprehensively and agile plus the various key aspects that need to be in place to ensure success in setting up the business and sales model.

Authors

Dr. Jan Burgard

Berylls Group CEO

jan.burgard@berylls.com

Willy Wang

Managing Director China

willy.wang@berylls.com

Hongtao Wei

Associate Partner

hongtao.wei@berylls.com

Soleiman Mansouri

Associate Partner

soleiman.mansouri@berylls.com

Lois Yang

Lead Analyst

lois.yang@berylls.com

The hard truth: Compelling cars don’t sell themselves

The European market is a tough environment, extremely clustered and, it is dominated by local brands that have already gained customers’ trust and loyalty. Competitive new entrants, like Tesla, and Lucid are further big threats. As such, Chinese OEMs must find the appropriate spot – the right business model to enter this market. At the core this means playing to their full strength which is “customer-centricity”. However, without setting up the ecosystem around their customers, this strength will not help gaining sales traction. And as we mentioned in our last article, not even maturing and compelling products will sell on their own. For instance, how do customers get to test drive a Chinese car without a partner that provides facilities and personnel to organize them? But let us discuss this step by step. In fact, let’s jump into the driver seat and live the path of the European customer on how to purchase/own a car?

A new customer segment for Chinese OEMs

First of all, customers in Europe, in general, are different from those in China but moreover the respective grouping of customers. The number of corporate customers (B2B) is significantly higher than that of individual customers (B2C), and the proportion of corporate can reach up to 70%. For these users, leasing instead of purchasing (with or without credit) is the preferred choice.

Individual customers have more options. They can purchase a car directly from the dealer with full payment; they can use credit to buy a car; they can lease a car; they can use subscription mode for their mobility needs, etc. Unlike Chinese customers’ purchasing behavior, direct purchase has a lesser significance for them.

Between a rock and a hard place of Sales models

To satisfy the different demands of European customers, there are various sales model setups that can be observed in Europe:

the traditional wholesale and dealer setup,
and, often mixed with agent model – the preferred option for transformation towards more customer-centricity

From a market entrant perspective, the traditional wholesale with dealers is the easiest way to set up the business model as it can be quickly deployed. But there are still some historical challenges to face with this traditional approach, such as:

in-transparent pricing
loss of customer data
uncontrollable customer experience

As a result, most new players (especially the tech-industry-rooted ones) choose to enter the new markets with agent models.

Thus, pure own retail seems to be the ideal model for new players to obtain maximum control. However, it requires a large amount of capital investment, a long lead time and it cannot be applied to all Chinese OEMs.

To define the right business and sales model, OEMs need to evaluate all influencing factors carefully and comprehensively, including internal targets but most importantly external factors which cover, for instance market structure, competitors and not to forget customer segments (at the very least B2B vs. B2C).

One partner alone will not do the trick

Based on the challenges of the different business and sales models alone, it’s obvious that a market entry cannot be done successfully without partnerships.

From our perspective, to cover the high variety of customers, there are at least four partner types a Chinese OEM needs to consider:

The Market Intelligence partner, is the key partner to understanding the core challenges and patterns of the European market
The Distribution partner (e.g., automotive dealers), as the sales executive, plays an important role in the physical customer interface
The Financial Service partner, the important influencing factor for the various purchase transaction types
The New Sales Model partners in particular, Subscription Service Providers

As we described in our previous articles, understanding the European Markets is the key to unlocking the success story of the respective market entrants. For that the right Market Intelligence partners are required. It is of utmost importance to acquire critical knowledge in the decisive market factors, such as:

Creating awareness of all legal and macro influence factors
Aligning with key trends
Understanding the customers and their needs
Creating transparency on market players

Based on this holistic understanding only, the right strategy and guard rails can be set for success.

While the Distribution partner topic seems to be obvious, it’s important for Chinese OEMs to find reliable and large dealers who are willing to invest (e.g., retail marketing). Considering the ongoing shift towards agent models by Western OEMs, dealers are squeezing their respective profit margins of their current business. Hence, we believe that most retailers are eager to cooperate with Chinese players.

As a matter of fact, we strongly recommend Chinese OEMs to set up a dealer partnership. This should be the first step when entering such a complex market as the European one. It enables physical showroom construction which provide the space for the decisive product experience and most significantly, customer experience services like test drives and consultation.

Besides traditional dealerships, Chinese OEMs ought to consider opening experience points, such as Brand Experience Centers, Flagship stores, or Pop-up stores, just to create market presence and touchpoints with customers.

Physical presence with respective customer experience (within the entire Customer Journey) is the door opener to the European markets. And an experienced dealer partner can significantly accelerate the penetration in terms of physical presence.

Financial Services partners are also of utmost importance due to the described B2B/B2C market segments. Customers are attracted by products presented online and in physical outlets, the conversion to a real sale requires offering the right financial solution. Customers, for instance in the Southern European markets, mostly will only acquire their new car if the right financing product is offered. Without these financial services, B2B sales and a substantial portion of the B2C business won’t be possible. European customers will expect the same availability of various financial options compared to the offering of Western OEMs’ (i.e., flexible leasing, combinations of leasing and financing, etc.)

In addition, we recommend New Sales Model partners such as subscription expert companies aligning to the new market trend of short-term ownership. Committing to a product from an unknown brand for ten thousand of Euros is certainly not an easy decision, but a short-term subscription (let’s say: 1-3 months) with adequate monthly fees can provide the first step into experiencing these new products on the market.

Lost in translation – what “doing business” and “partnership” mean

As these issues all rely on partners, Chinese entrants need to start their partnering exceedingly early on. They need to find committed partners with a strategic fit to the core values of their respective brands to be successful.

Key questions may arise for acquiring the most suitable partners:

What is the most suitable corporation mode?
How to find trustworthy partners?
How to gain trust from the desirable partner?
How to negotiate a roadmap with them towards the final goal?
Who is responsible for which criteria of the partnership?
How to set up KPIs? How to answer their questions?
How to prioritize the process?

These are real-life problems confronted by Chinese OEMs currently. Furthermore, there are crucial aspects that can empower a swift partnership or hinder it. Some Asian entrants, for instance, required many years to set up their first strategic partnerships without a clear path on what to be achieved in the coming years. One of these core challenges is the difference in cultural understanding of “how to do business” and what “partnership” means.

While the European approach is rather streamlined and all aspects of negotiations are based on a clear vision, strategy, and milestones, the Chinese way is based more on an iterative process with nothing being carved in stone – sometimes meaning that even contracts sought to be renegotiated. This leads to obvious frustration on both sides.

In order to proactively prevent such frustration, the following aspects are required to successfully launch a partnership:

Clear market understanding on all influencing factors
Described business scope and model
Defined strategy and clear targets with KPIs for the coming years (e.g., revenue, retail points, price strategy, customer touchpoints)
Roles and responsibilities (internally and with partners)
Proper blueprint and toolkit preparation
Intercultural and communication training

At Berylls, we have deep international experience in solution findings about the “Go-to-Market” topic and we think ecosystem/partnership management is one of the most crucial success factors. We are interlinked with widespread relationships with many automotive participants in Europe. As such, we can provide you a name list of partners altogether with detailed Berylls inputs. We join our clients in the selection process of the most suitable potential partners and accompany the whole negotiation process.

Besides, our dedicated “Berylls partnership management guidebook” will address most of the key questions concerned by partners and give clear guidance for all references. Also, our diverse and international team has a significant understanding of cultural and communication challenges, as we are passionate and compassionate to help our clients in their success.

With this part, we conclude our short series on Chinese OEMs’ performance in Europe. Missed the other parts? Find the complete series here and stay tuned for further insights from the China team.

Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

His responsibilities include accelerating the transformation of luxury and premium OEMs, with a particular focus on digitalization, big data, connectivity and artificial intelligence. Dr. Jan Burgard is also responsible for the implementation of digital products at Berylls and is a proven expert for the Chinese market.

Dr. Jan Burgard started his career at the investment bank MAN GROUP in New York. He developed a passion for the automotive industry during stopovers at an American consultancy and as manager at a German premium manufacturer. In October 2011, he became a founding partner of Berylls Strategy Advisors. The top management consultancy was the origin of today’s Group and continues to be the professional nucleus of the Group.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

Willy Wang

Willy Lu Wang (1981) joined Berylls Strategy Advisors in 2017. He started his career participating in the graduate program of Audi focusing on production planning. After stations at another strategy consultancy as well as being the strategy director for a German Tier-1 supplier, he is now responsible for the China business at Berylls.

He has a broad consulting focus working for all clients in China, whether they are JVs, WOFEs or pure local players. He is also responsible for the development of AI and Big Data products dedicated towards the Chinese market further strengthening the Berylls End-to-End strategy and product development capabilities.

Wang studied Electronics & Information Technology with focus on Systems and Software Engineering and Control Theory at Karlsruhe Institute of Technology.

Hongtao Wei

Hongtao Wei (1988), Associate Partner, joined Berylls Strategy Advisors in 2015, an international strategy consultancy specializing in the automotive industry, where he focuses on all issues related to the Chinese automotive market. In addition to Western manufacturers in China, his clients also include Chinese OEMs, investors, provincial governments, and state-owned enterprises.

He has profound expert knowledge in the areas of sales and aftersales. His other areas of expertise include digitalization, connectivity, and turnaround management.

He studied Sinology, Economics and Statistics at the Ludwig-Maximilians-Universität in Munich.

Soleiman Mansouri

Soleiman joined the Berylls Group in March 2022. He has set his focus on customer-centrist solutions, gaining experience in Product- and Corporate Strategy, Consulting with the focus on the OEM business. His Automotive career started with digitalization of the Aftersales of an US OEM in Europe and took him to China to the leading German OEM group, heading the Product and Portfolio department. He gained intensive consulting experience with one of the top management consulting firms and as a freelance consultant. Before joining Berylls, he was the Director Go-to-Market of one of the top Chinese OEMs supporting their entrance into the EU market. Soleiman is a graduated M.A./MBA in International Business from the University of Hamburg and ECUST/Shanghai.

Soleiman joined the Berylls Group in March 2022 and is part of the Asia-team, responsible for supporting all players in a successful market entrance. Also, provides profound expertise of customer-centric Product Marketing and Portfolio Strategy approaches to our clients.

Soleiman is expert in customer-centric Product-/Portfolio Strategy, Go-To-Market, Corporate Strategy and Entrepreneurship.

er WCAR genannte ETF ist der erste Index, der ausschließlich Unternehmen der globalen Wertschöpfungskette innerhalb der Mobilitäts- und Automobilindustrie zusammenfasst.

München, Frankfurt, 27.September 2022: Berylls, LeanVal Research und WisdomTree, der Sponsor börsengehandelter Fonds (ETF) und börsengehandelter Produkte (ETP), geben die Einführung des WisdomTree Global Automotive Innovators NTR UCITS ETF (WCAR) Index be-kannt.
Der WCAR ist der erste Index, der das gesamte globale Ökosystem der Automobilindustrie abdeckt und die zukunftsorientierten Strategien der Unternehmen berücksichtigt, indem er die 100 relevantesten und vielversprechendsten börsennotierten Unternehmen weltweit um-fasst. Der Index ist damit sortenrein und umfasst die folgenden Sektoren innerhalb der Auto-mobilindustrie: OEMs, Zulieferer, Autohändler, Mobilitätsdienstleister und Infrastrukturanbie-ter. Dadurch kann der ETF auch alle Megatrends erfassen, die den Wandel der globalen Auto-mobilindustrie prägen. Diese sind Konnektivität, autonomes Fahren, geteilte Mobilität und Elektrifizierung.

Bei der Entwicklung des WCAR ist WisdomTree eine Partnerschaft mit Berylls und LeanVal Research (LeanVal) eingegangen. Berylls, im Jahr 2011 gegründet und bis heute auf nahezu 200 Mitarbeiter gewachsen, hat einen klaren Fokus auf die Trends, die die Zukunft der Mobilitätsbranche prägen. Damit besitzt Berylls einen einzigartigen und vollumfassenden Überblick über das Universum der Unternehmen, die von den Megatrends der Mobilität profitieren werden. Die Auswahl, der für den WCAR selektierten Unternehmen basiert dabei auf einer automatisierten Analyse von mehr als 20 unabhängigen, quantitativen, proprietär durch Berylls entwickelten Kennzahlen, die die Strategie, Wertschöpfung, und Wahrnehmung der einzelnen Unternehmen erfassen und vergleichbar machen. Bei der Unternehmensauswahl für den WCAR arbeitet Berylls eng mit LeanVal zusammen. Das Equity-Research-Unternehmen, gegründet im Jahr 2017, verfügt über eine umfängliche Expertise in der Analyse, Bewertung und Auswahl von Aktien sowie in der Entwicklung von Aktienstrategien auf Basis hochwertiger Daten.

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Autor

Christian Bangemann

Head of PR & Media Relations

christian.bangemann@berylls.com

Dr. Jan Burgard

Dr. Jan Burgard (1973) ist CEO der Berylls Group, einer internationalen und auf die Automobilitätsindustrie spezialisierten Unternehmensgruppe.
Sein Aufgabengebiet umfasst die Transformation von Luxus- und Premiumherstellern, mit besonderen Schwerpunkten auf Digitalisierung, Big Data, Start-ups, Connectivity und künstliche Intelligenz. Dr. Jan Burgard verantwortet bei Berylls außerdem die Umsetzung digitaler Produkte und ist ausgewiesener Spezialist für den Markt China.
Dr. Jan Burgard begann seine Karriere bei der Investmentbank MAN GROUP in New York. Die Leidenschaft für die Automobilitätsindustrie entwickelte er während Zwischenstopps bei einer amerikanischen Beratung und als Manager eines deutschen Premiumherstellers.
Im Oktober 2011 komplettierte er die Gründungspartner von Berylls Strategy Advisors. Die Top-Management-Beratung ist die Basis der heutigen Group und weiterhin der fachliche Nukleus aller Einheiten.
An das Studium der Betriebs- und Volkswirtschaftslehre, schloss sich die Promotion über virtuelle Produktentwicklung in der Automobilindustrie an.

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The Porsche question – value creation by separation?

Our new ETF tracks the top 100 automobility companies with the greatest potential to shape the industry’s future – and the index’s performance offers valuable insights for auto CEOs and CFOs

Volkswagen is targeting a valuation of between €70bn and €75bn for Porsche when the sports car brand is listed as a standalone company on the Frankfurt stock exchange later this month. This is not far off Volkswagen’s current market cap of €90bn, which is not expected to drop materially after the IPO. So why are the two valued so much more highly as separate companies?

The short answer is that Volkswagen’s stock is chronically undervalued. Archrival Toyota has been trading at between two and three times the stock market value of VW for at least the past three years. The contrast with newer OEMs is even starker – Tesla, Li Auto and NIO produce far fewer cars, but on a per vehicle basis, have a market value that is 20 to 90 times higher that of Volkswagen, BMW and Mercedes, which are similarly undervalued.

They too have attempted to remedy this situation, Mercedes by spinning off its truck division in 2021 and BMW by launching a €2bn stock buyback program earlier this year, but neither change has resulted in a significant reevaluation of the shares.

The fundamentals of revenue, profitability and shareholder returns alone cannot explain these disparities in valuation. Nor can differences of such magnitude be explained away by putting them down to hype or irrational investment strategies. We believe a broader type of assessment is required, one that takes in investor sentiment and market cap, but also resilience to external shocks such as the war in Ukraine, the ongoing disruption of global supply chains, and the larger transformation of the automotive sector as a whole.

A new automotive index with a different approach to valuation

This is why Berylls, with our partners LeanVal and WisdomTree, has launched the WisdomTree Global Automotive Innovators UCITS ETF (WCAR). The index tracked by WCAR is made up of the 100 most relevant and promising publicly listed automotive companies worldwide, and is the first to cover the entire global automobility ecosystem. As well as original equipment manufacturers (OEMs), the index includes suppliers, dealer groups, mobility service providers, and infrastructure companies.

The 100 index members are selected based on a comprehensive set of criteria that looks beyond company financials. It also considers strategy, the value of the network they are part of, and investor sentiment.

The highly automated, twice yearly rebalancing of the index draws on quantitative data analysis, semantic data crawling and core financials. Tracking of the index started in 2019, and there are already indications that the investment approach can yield pertinent insights for automobility CEOs and CFOs seeking to improve their company’s stock market performance.

Lesson #1 – Identify the hidden value of future potential

For an index to be truly representative of an industry as complex as automotive, it needs to protect against the bias inherent in under- and overvalued stocks. The WisdomTree Global Automotive Innovators index does this by assessing a company’s strategy, value network and investor sentiment, as well as its core financials. This means stock selection is based on overall performance, not current market valuations. The index share of any one stock is also capped at maximum 2.5 percent at each rebalancing.

The WisdomTree Global Automotive Innovators index further over-represents the stocks of newcomers that have the potential to be more influential in shaping the automotive future than their present-day valuation suggests. In an industry that has often been re-shaped by hidden champions, we believe this approach makes the index a true indicator of the automotive future.

Lesson #2 – OEMs are not the only winners

In 2021, many OEMs posted record profits. However, on the WisdomTree Global Automotive Innovators index, dealer groups have clearly outperformed manufacturers since at least beginning of 2021, indicating that they were able to pocket a bigger share of the additional earnings that resulted from offering fewer customer discounts amid global production shortages.

Margins are always a function of the relative bargaining power of the different players that make up an industry’s value chain. Although the vehicle shortage will be a temporary phenomenon, OEMs should take cues from the strong performance of their retailers to manage business risks more actively themselves rather than offload them on to their suppliers and business partners. Only thus can OEMs ensure they get the full upside potential too.

Lesson #3 – Japanese automotive companies have the momentum

The pace of recovery from the combined effects of Covid-19 and global supply shortages remains very uneven across the world’s leading automotive manufacturing regions. Japanese auto companies (OEMs and suppliers alike) were relatively late in their recovery but have shown the strongest growth momentum over recent months, and are now attracting significantly higher valuations than German OEMs, for example. It seems that their Japan-centered supply chains prove more resilient in the current crisis than do the European OEMs’ globally more fully integrated supply networks.

Lesson #4 – IPOs aren’t the only way to avoid being hit by a “conglomerate discount”

Part of the reason that German OEMs remain undervalued is that capital markets have come to dislike industrial conglomerates. Both the Daimler truck spin-off and the Porsche IPO can be seen as evidence of OEMs trying to respond to this change in investor expectations.

It is worth noting then, that the index shows that breaking themselves up is not the only way OEMs can avoid paying a conglomerate discount. China’s Geely has succeeded in convincing investors of the advantages of operating through a single holding structure. In other areas of the automobility ecosystem – notably battery cell and chip production and vehicle software development – capital markets actually reward a high degree of integration. This is because these areas will shape the automotive future to a much greater extent than other, more traditional areas of automotive value creation.

Lesson #5 – ESG will evolve from a screening factor to a key differentiator

Currently, the WisdomTree Berylls LeanVal Global Automotive Innovators index uses ESG criteria only as a screening factor. In part this is because there is not yet a complete and universally accepted set of ESG investment criteria.

However, we’re already seeing a strong correlation between ESG scores and stock performance among the 100 index companies. Our sentiment analysis shows that investors see ESG compliance as an indirect indicator of a company’s willingness to innovate as well as a direct indicator of a company’s ability to mitigate business risks.

The influence of ESG criteria shows that many investors are already looking beyond fundamentals to build a more accurate picture of a company’s value and growth potential. Strong ESG commitments are likely to become even more important in the future, and the links investors are drawing with innovation and risk management make clear the massive transformation that has already started in the way automotive stocks are valued.

The partnership

WisdomTree Investments, Inc. (WisdomTree) is an ETF and ETP sponsor and asset manager headquartered in New York. WisdomTree offers products covering equity, commodity, fixed income, leveraged and inverse, currency, cryptocurrency and alternative strategies. WisdomTree currently has approximately $77.8 billion in assets under management globally.

LeanVal Investments (LeanVal) was founded in 1991. The team combines extensive industry and academic experience and employs a data-driven approach to fundamental research and the design of equity strategies.

Berylls Strategy Advisors GmbH (Berylls) was founded more than a decade ago and today, with almost 200 colleagues, brings a clear focus to the trends shaping the future of the automobility industry. Berylls’ dedicated automotive industry expertise allows them to form bottom-up views on the universe of companies poised to benefit from automobility megatrends.

Authors

Dr. Jan Burgard

CEO Berylls Group

jan.burgard@berylls.com

Malte Broxtermann

Associate Partner

malte.broxtermann@berylls.com

Jens Garrelfs

Associate Partner

jens.garrelfs@berylls.com

Björn Simon

Consultant

bjoern.simon@berylls.com

Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

Malte Broxtermann

Malte is an expert in the development and implementation of automotive digitization strategies.

He focuses on helping clients scale (generative) artificial intelligence to improve their bottom line across the entire automotive value chain. His primary customers are automotive manufacturers and their suppliers, especially those active in the Software-Defined-Vehicle space.

Before his time at Berylls by AlixPartners (formerly Berylls Strategy Advisors), he advised leading North American utility companies. Prior to that, he saved lives as emergency medical technician. Malte holds master’s degrees in economics from Maastricht University and Queen’s University in Canada.

albleitermangel, Rohstoffpreise, Pandemie und Lockdown sind Schlagworte, die uns in den letzten zwei Jahren in Mark und Bein übergegangen und aus unserem Wortschatz – leider – nicht mehr wegzudenken sind.

Dies gilt insbesondere für die Automobilindustrie, welche so stark wie kaum
eine andere Industrie von den jüngsten Krisen betroffen war. Das ist das Hauptthema im Artikel „Halbleiter, Rohstoffe und Pandemie – die Automobilzulieferer kommen nicht zur Ruhe“ von Dr. Alexander Timmer, Dr. Jürgen Simon und Lukas Kirchhefer (Seite 17).
Seit der Finanzkrise galt die Automobilindustrie als sicherer Hafen und war ein Synonym für kontinuierliches Wachstum. Umsatzwachstum und Margen im hohen einstelligen Prozentbereich waren normal und galten als Industriestandard. Fakt ist, dass die Zeiten der Planbarkeit vorerst vorbei sind. Zur Wahrheit gehört aber auch, dass sich Hersteller und Zulieferer weltweit schneller von der Krise erholt haben als noch vor zwei Jahren gedacht.

Unsere Analyse der weltweit 100 größten Zulieferer zeigt, dass Gewinne und Umsätze wieder auf dem Vorkrisenniveau aus 2019 liegen. Einestolze Leistung, wenn wir uns in Erinnerung rufen, dass die Umsätze noch vor zwei Jahren infolge der Pandemie um 14 % eingebrochen und die Gewinne auf ein historisches
Tief von 3 % gesunken waren. „Trotz der Aufs und Abs im Jahr 2021 mit Coronakrise im Frühjahr und Chipmangel im Herbst sind die Ergebnisse in Summe positiver ausgefallen, als wir das erwartet hatten“, bewertet mein Kollege Dr. Jan Dannenberg in unserem Doppelinterview (Seite 11) die
jüngste wirtschaftliche Erholung. Zu den klaren Profiteuren gehören die Halbleiterhersteller, mit rekordverdächtigen Margen von bis zu 27 %.

Dies belegt eindrucksvoll: Totgesagte leben länger. Die öffentliche Debatte zur
Zukunftsfähigkeit der Automobilindustrie war in den letzten Jahren maßgeblich geprägt durch fehlende Nachhaltigkeit der Geschäftsmodelle und nicht
zeitgemäße Produkte. Zulieferer wie Hersteller haben jedoch die Zeit in der
Krise wirkungsvoll genutzt und ihre Hausaufgaben gemacht. So riefen sie Kostensenkungsprogramme ins Leben und investierten in die Widerstandsfähigkeit der Lieferketten. Hier ist aber nur in seltenen Fällen eine Rückverlagerung das Mittel der Wahl. Im Fokus steht neben dem Aufbau von Beständen und Alternativlieferanten auch die digitale Überwachung der Lieferketten. Das beschreibt mein Kollege Ralf Walker im Artikel „Pandemie, Chipmangel und politische Unruhen – kommt jetzt die Rohstoffkrise?“ (Seite 5), der in Zusammenarbeit mit Peter Trögel, Christian Grimmelt und Eren Duygun entstanden ist.

Die Mehrzahl der deutschen Zulieferer haben ihre Strategien überarbeitet, um
die Abhängigkeit vom Verbrennungsmotor sukzessive zu reduzieren. Gleiches
gilt für die Hersteller, die ihre Portfolios schneller und konsequenter auf batterieelektrische Fahrzeuge umstellen. Wir können konstatieren, dass sich die Automobilindustrie nicht nur einen Ruf als versierter Krisenmanager, sondern auch als treibende Kraft für den Umstieg auf die Elektromobilität erarbeitet hat. Weiter so!

Der Rückblick auf den Umgang mit den Herausforderungen der letzten Jahre
sollte uns zuversichtlich stimmen, dass wir auch die Folgen des Ukraine-Krieges
und der chinesischen No-Covid-Strategie meistern werden. Dennoch: „Wir sind
nicht an dem Punkt, wo sich Lösungen für die vielfältigen Probleme abzeichnen.
Da sind wir noch lange nicht durch.“, wie es Jan Dannenberg abschließend zusammenfasst. Zumal der Wettbewerb aus China nicht schläft!

Ich wünsche Ihnen eine spannende Lektüre,

Berylls Insight

Top 100-Zuliefererstudie 2022

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Autoren

Dr. Jan Dannenberg

Executive Partner

jan.dannenberg@berylls.com

Dr. Alexander Timmer

Partner

alexander.timmer@berylls.com

Dr. Jürgen Simon

Associate Partner

juergen.simon@berylls.com

Dr. Jan Dannenberg

Dr. Jan Dannenberg (1962) ist seit 1990 Berater der Automobilindustrie und seit Mai 2011 Gründungspartner bei Berylls Strategy Advisors. Bis zum Frühjahr 2011 war er acht Jahre international als Partner – davon fünf Jahre als Associate Partner – für Mercer Management Consulting und Oliver Wyman tätig. Er ist ausgewiesener Spezialist für Innovationen und Markenmanagement in der Automobilindustrie und berät im Schwerpunkt Zulieferer und Investoren zu Strategie, Mergers & Acquisitions und Performance Improvement. Zudem ist er Geschäftsführer von Berylls Equity Partners, eine auf Mobilitätsunternehmen spezialisierte Beteiligungsgesellschaft.

Bachelor of Arts in Volkswirtschaftslehre von der Stanford University, Studium der Betriebswirtschaftslehre und Promotion an der Universität Bamberg.

Kontakt Über Berylls

Dr. Alexander Timmer

Dr. Alexander Timmer (1981) ist seit Mai 2021 als Partner bei Berylls by AlixPartners (ehemals Berylls Strategy Advisors) tätig, einer internationalen und auf die Automobilitätsindustrie spezialisierten Strategieberatung. Er ist Experte für Markteintritts- und Wachstumsstrategien, M&A und kann auf eine langjährige Erfahrung im Operations-Umfeld zurückschauen. Dr. Alexander Timmer berät seit 2012 Automobilhersteller und -zulieferer im globalen Kontext. Er verfügt über ein fundiertes Expertenwissen in den Bereichen Portfolioplanung, Entwicklung und Produktion. Zu seinen weiteren fachlichen Schwerpunkten zählen unter anderem Digitalisierung und der Themenkomplex rund um die Elektromobilität.
Vor seinem Einstieg bei Berylls Strategy Advisors war er unter anderem für Booz & Company und PwC Strategy& als Mitglied der Geschäftsführung in Nordamerika, Asien und Europa tätig.
Im Anschluss an sein Maschinenbaustudium an der RWTH Aachen und der Chalmers University in Göteborg promovierte er im Bereich der Fertigungstechnologien am Werkzeugmaschinenlabor der RWTH Aachen.

Kontakt Über Berylls

Dr. Jürgen Simon

Dr. Jürgen Simon (1986) ist als Associate Partner bei Berylls by AlixPartners (ehemals Berylls Strategy Advisors) tätig, einer internationalen und auf die Automobilitätsindustrie spezialisierten Strategieberatung. Er ist Experte für Vertriebs- und Unternehmensstrategien sowie M&A und kann auf eine langjährige Beratungserfahrung zurückschauen. Er berät seit 2011 Automobilhersteller und -zulieferer und verfügt über fundiertes Expertenwissen in den Bereichen ganzheitliche Strategieentwicklung, Geschäftsmodelle und Commercial Due Diligence. Weitere Schwerpunkte liegen in Markteintrittsstrategien sowie Themen rund um das „Software Defined Vehicle“. Als diplomierter Ökonom der Universität Hohenheim hat er vor seinem Einstieg bei Berylls am Institut für Unternehmensführung des Karlsruher Instituts für Technologie (KIT) promoviert.

Kontakt Über Berylls

he intensifying trend from vehicle ownership to usership has already been proven by our recent customer survey. VaaS providers are now echoing our results: The demand for flexible and digital VaaS products is increasing and fuels BEV sales in Europe.

In January 2022, we published a survey asking a representative set of customers on their future mobility needs. The results were clear: Customers increasingly demand flexible VaaS products, they will choose fully digital online journeys more often and they are willing to try new brands and drivetrains. Hence, VaaS also drives digitalization in vehicle sales and contributes to BEV adoption.

To complement the customer perspective, we now asked some of the leading providers how they perceive the trend towards VaaS, how they assess its implications and how they plan to act upon it. In our latest study we interviewed:

Benedikt Schell, CEO, Mercedes-Benz Bank

Enrico Rossini, Head of Fleet and New Mobilities, Mobilize Financial Services

Dirk Adelmann, CEO, smart Europe
René Müller, Head of B2B Sales, smart Europe

René Müller, Head of B2B Sales, smart Europe

Dr. Christian Dahlheim, CEO, Volkswagen Financial Services

Magnus Fredin, SVP Global Online Business, Volvo Cars

Daniel Garnitz, CEO, Faaren

Niels Reimann, CPO, Fleetpool

Matthias Albert, CEO, ViveLaCar

By combining the customer survey with the perspectives of top executives in the industry, Berylls created the first 360 degree view on the Vehicle-as-a-Service market in Europe.

Can’t wait to read more? Download the insight now or visit our VaaS Clusterpage!

Berylls Insight

How Vehicle-as-a-service is accelerating BEV sales in Europe

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Authors

Christopher Ley

Associate Partner

christopher.ley@berylls.com

Florian Tauschek

Associate Partner

florian.tauschek@berylls.com

Tobias Detzler

Senior Consultant

tobias.detzler@berylls.com

Benedikt Schell, CEO, Mercedes-Benz Bank
Enrico Rossini, Head of Fleet and New Mobilities, Mobilize Financial Services
Dirk Adelmann, CEO, smart Europe
René Müller, Head of B2B Sales, smart Europe
Dr. Christian Dahlheim, CEO, Volkswagen Financial Services
Magnus Fredin, SVP Global Online Business, Volvo Cars
Daniel Garnitz, CEO, Faaren
Niels Reimann, CPO, Fleetpool
Matthias Albert, CEO, ViveLaCar

By combining the customer survey with the perspectives of top executives in the industry, Berylls created the first 360 degree view on the Vehicle-as-a-Service market in Europe.

Can’t wait to read more? Download the insight now or visit our VaaS Clusterpage!

Christopher Ley

Christopher Ley joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) in October 2021 as Partner. He has over 14 years of top management consulting experience with focus on new business models and market expansions within the automotive & mobility industry. He is an expert around Vehicle-as-a-Service, comprising vehicle finance & leasing, fleet management and mobility services. Christopher Ley is advising OEMs, Captives, Financial Services Companies, PE & VC Investors, Leasing & Rental Companies, Fleet Managers and Mobility Startups around the transformation from one-time sales towards use-based multi-cycle business models on a global level.

Prior to joining Berylls, Christopher Ley has been working for other international management consulting firms, amongst others Monitor Deloitte and Alvarez & Marsal. He holds a diploma degree in business administration from Johannes Gutenberg-Universität in Mainz and an MBA from Colorado State University.

Florian Tauschek

Florian Tauschek has 8 years of experience in strategy consulting. He focuses on business & sales model strategies for flexible Vehicle-as-a-Service (VaaS) offers.

He is an expert in topics such as customer & vehicle lifetime value optimization, the transformation of the underlying automotive sales model from one-time asset sales towards multicycle models generating recurring revenues as well as market entry strategies for various VaaS products such as operating lease or subscriptions. Furthermore he is the author of several market leading studies around VaaS.

He holds a Master of Science degree in management from HHL – Leipzig Graduate School of Management.

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Making E-Mobility Industrialization Work

Making E-Mobility Industrialization Work

Authors

Dr. Ralf Walker

Fritz Metzger

Peter Trögel

FACTOR ONE: Design for Production Complexity

FACTOR TWO: E-mobility is Hyper-Sensitive to ‘Technical Cleanliness’

FACTOR THREE: Step Up Project and Partner Management

FACTOR FOUR: Feedback is Critical

FACTOR FIVE: Integrate the Customer

KEY ELEMENTES FOR A SAFE CELL LAUNCH

Fritz Metzger

Dr. Ralf Walker

Ramp-up Excellence: How can OEMs and suppliers master E-Mobility launches?

Ramp-up Excellence: How can OEMs and Suppliers master E-Mobility launches?

Berylls Insight

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Autoren

Heiko Weber

Fritz Metzger

Christian Grimmelt

Heiko Weber

Fritz Metzger

Christian Grimmelt

Supplier Selection in unstable times

Supplier Selection in unstable times

Berylls Insight

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Autoren

Timo Kronen

Christian Grimmelt

Valentin Froh

Timo Kronen

Christian Grimmelt

Quo Vadis, Chinese OEMs in Europe? Part 3

Quo Vadis, Chinese OEMs in Europe? Part 3

Authors

Dr. Jan Burgard

Willy Wang

Hongtao Wei

Soleiman Mansouri

Lois Yang

The hard truth: Compelling cars don’t sell themselves

A new customer segment for Chinese OEMs

Between a rock and a hard place of Sales models

One partner alone will not do the trick

Lost in translation – what “doing business” and “partnership” mean

Dr. Jan Burgard

Willy Wang

Hongtao Wei

Soleiman Mansouri

Pressemitteilung: Mit Berylls Know-How und Expertise – WisdomTree erweitert ETF-Palette

Pressemitteilung: Mit Berylls Know-How und Expertise - WisdomTree erweitert ETF-Palette

Berylls Pressemitteilung

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Autor

Christian Bangemann

Dr. Jan Burgard

The valuation game – What recent automotive transactions and ESG-Criteria tell us about current automotive stock valuations

The valuation game - What recent automotive transactions and ESG-Criteria tell us about current automotive stock valuations

The Porsche question – value creation by separation?

A new automotive index with a different approach to valuation

Lesson #1 – Identify the hidden value of future potential

Lesson #2 – OEMs are not the only winners

Lesson #3 – Japanese automotive companies have the momentum

Lesson #4 – IPOs aren’t the only way to avoid being hit by a “conglomerate discount”

Lesson #5 – ESG will evolve from a screening factor to a key differentiator

The partnership

Authors

Dr. Jan Burgard

Malte Broxtermann

Jens Garrelfs

Björn Simon

Dr. Jan Burgard

Malte Broxtermann

Top 100-Zuliefererstudie 2022 – Die Branche kommt nicht zur Ruhe

Top 100 Zuliefererstudie 2022 - Die Branche kommt nicht zur Ruhe