Cairneagle Consulting: Automotive

The last three years have driven some serious soul searching across the automotive sector. New car volumes collapsed in 2008 and 2009 to be given a temporary reprieve by “scrappage” schemes in many major economies, including the UK. Used car prices crashed at an unprecedented rate in 2008 only to recover in 2009 and 2010 on the back of a shortage of good quality stock.

Given the volatility in used car markets, manufacturers, leasing companies and motor finance providers have all suffered significant losses on residual value exposure over the past three years. In 2008 and into 2009, large provisions were the order of the day, only to see the dramatic turn-around reverse, in some cases in its entirety, the previous losses in 2010. 2011 has seen additional declines, with considerable anxiety about the impact on weak balance sheets.

Distributors have unsurprisingly had a rough ride, but many of the stronger players, with balanced new and used operations had bumper years in 2010. The manufacturing sector has seen a real shake out with too many brands changing hands to list here but the shifting dynamics between the markets of the US, Europe, Asia have been unprecedented.   

Cairneagle’s principals have worked with many leading companies covering large tracts of the automotive value chain over the last 15 years. We have worked for manufacturers, dealer networks (with a particular focus on luxury market distribution), leasing companies, commercial vehicle distributors, aftermarket service providers and, even, roadside services.

With detailed knowledge of the key value drivers, consumer behaviours, the competitive landscape and the market environment we help clients address a broad range of priority issues including portfolio strategy, competitive strategy, M&A, performance improvement, restructuring, performance management, sales force optimisation, financing and optimal capital structure.

We have recently been asked by a leading motorsport team to assist them in prioritising strategic direction for sustained technical leadership in the low-carbon world.