Stories from the Road - Deloitte Automotive Group
Deloitte’s U.S. Automotive group is working ahead of the curve in helping our clients navigate the complex issues and challenges impacting their companies and the rapidly evolving automotive industry. Below we provide some “stories from the road” that demonstrate the value we have delivered to automotive companies across the value chain.
- Distressed supplier and M&A transaction services
- Finance transformation
- Growth strategy and profitability improvement
- M&A due diligence
A key supplier to one of the world’s largest automotive OEMs had fallen into financial distress and was close to shuttering its manufacturing facilities. The OEM, facing significant production disruptions that would have cost the company millions of dollars, engaged Deloitte to help maintain delivery of critical components sourced through the distressed supplier.
Deloitte created a cross-functional team of consulting, tax, financial advisory, and M&A transaction automotive specialists to review the supplier’s operations, as well as develop recommendations for the OEM to help mitigate future supply chain risk. Activities included:
- Assisted management with a transaction to convey ownership and maintain current continuity of the existing production environment
- Evaluated alternative parts production sources and helped facilitate transition to other sources where appropriate
Deloitte’s approach helped identify tangible operational cost savings and cost avoidance, as well as significant additional value associated with helping the OEM maintain production continuity.
One of the largest automotive OEMs in North America implemented a Quality & Productivity Management (QPM) process to improve quality and productivity across all functions. Deloitte was engaged to support the company’s finance function and its QPM activities, with a specific focus on finance systems and processes. Work streams included financial reporting, material cost control, product development, and cash sustainability.
Deloitte helped define, organize and support governance for the QPM work streams, including:
- Standardizing report formats across activity categories and projects
- Creating scorecards to identify all projects globally and report monthly status
- Identifying and escalating issues
- Organizing and planning structured, recurring status meetings with company leaders
- Collecting and organizing project budget spending and forecasts
With Deloitte’s help, the OEM was able to increase transparency for management’s decision making, while also reducing redundant activities occurring across the globe. The results also helped enforce the need to consistently develop systems and processes globally, as well as prioritize development activities to align with corporate objectives.
“Gartner named Deloitte a leader, based on capabilities, in its 2012 Magic Quadrant for Global Financial Management Consulting Services”
Source: Garner’s Magic Quadrant for Global Financial Management Consulting Services, 2012; © Gartner Information, LLC. Reproduced under license.
An automotive supplier had recently experienced significant change, including being acquired by a foreign company and management wanted to re-think the company’s growth plans at home and abroad after emerging from several years of struggling financial performance. The company’s new foreign owners wanted to bring the company’s technology to their market, as well as drive meaningful share growth there and other emerging markets, while also improving profitability.
Deloitte assisted management with the design of the company’s growth strategy, formulating a path to gain share in the growing foreign market by targeting a set of global and domestic vehicle manufacturers that might benefit from the company’s portfolio of innovative technologies. Deloitte also assessed the company’s existing U.S. and European strategy and evaluated other emerging markets for growth. In addition, Deloitte advised the company as it designed an engineering model that could ramp up to serve global growth, while delivering existing business in the U.S. and Europe. Finally, Deloitte helped the company improve its cost structure and profitability through spend analysis and material cost reduction.
With Deloitte’s help, the company now has an executable plan to ramp up quickly and drive growth, while building out their business capabilities at home and abroad.
One of the world’s largest automotive manufacturers wanted to launch a telematics and connected vehicle service, and asked Deloitte to help plan and execute the rollout and manage the launch activities across the enterprise, spanning multiple business functions, including Engineering, IT and Finance. As part of the engagement, Deloitte helped the client define the customer experience, fine-tune the operating model, drive the system integration and software development life cycle, and establish specific business processes and infrastructure to support the new business.
Deloitte developed a cross-functional implementation model that included a broad governance and program management structure to re-plan, adapt and drive the program. Working with management, Deloitte:
- Developed an enterprise level program management structure and processes that engaged multiple internal teams and external vendors
- Created key solutions that integrated the telematics architecture, and supported the client in managing key service providers
- Developed and executed rigorous testing and release management discipline and methodology
- Designed and executed product launch sequence, including marketing, sales and training activities
With Deloitte’s assistance, the client achieved an on-time launch of a complex, new line of business, and positioned them for new leadership opportunities in the marketplace.
A foreign company had acquired an automotive manufacturer and asked Deloitte to assist with components of the transaction, including due diligence on selected carve out assets of a target with nearly two dozen worldwide manufacturing facilities.
Deloitte delivered a cross-functional team of tax, consulting, and financial advisory specialists to help the company address several complex business issues, including:
- Accounting and tax diligence
- Tax structuring
- Development and implementation of a global business plan
- Development of a framework for potential IFRS conversion
Deloitte was able to deliver both multidisciplinary technical insight, as well as a deep understanding and perspective about the U.S. and global automotive industry. In addition, our team identified significant savings for the company based on our insights on working capital.
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