Sales and marketing transformation agenda 2025

Munich, April 2024

Sales and marketing transformation agenda 2025

Munich/Detroit, April 2024

T

he digital revolution is transforming automotive sales and marketing at an accelerating pace as economies bounce back from the pandemic.

Amid the upheaval, the winners will be those players that capture the opportunities created by new, data-driven technologies to improve the customer journey.

Berylls Mad Media has developed a direct-to-consumer sales and marketing approach which we call the “Infinity Loop” to give you a head start over the competition. The loop delivers continuous optimization of the customer journey through constant interaction between data-driven end-to-end (E2E) marketing activities and omni-channel sales.

Time is short. The sales and marketing transformation race is a sprint where the winners will emerge at speed. For this reason, Berylls Infinity Loop leverages five key transformation levers to help you cross the finishing line by 2025.

Discover more in our point of view.

Berylls Insight
Sales & marketing transformation agenda 2025
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Authors
Jonas Wagner

Partner & Managing Director

Sascha Kurth

Partner

Maximilian Möller

Partner

Henry Lundt

Principal

Jonas Wagner
Jonas Wagner (1978) is a Partner at Berylls Strategy Advisors and Managing Director of Berylls Mad Media. He has been a consultant in the automotive industry for more than 18 years. Wagner supports the strategy and organizational development of leading automotive manufacturers in the transformation of their sales and marketing. This includes the digitalization of the customer interface, the introduction of new sales models and the development of a data-driven sales and marketing organization. The focus is on optimizing the customer journey across all divisional boundaries – whether sales, after sales or financial services.
Before joining Berylls, he worked for the strategy consulting firm Oliver Wyman for automotive manufacturers in Germany and abroad.
He studied business administration at the Aarhus School of Business and at the University of Mannheim, focus on international management, marketing and controlling.
Sascha Kurth

Sascha Kurth (1987) is a Partner at Berylls Mad Media, the Sales & Marketing Transformation unit of Berylls Group, a company specializing in the automotive industry. He is an expert in building, transforming, and restructuring sales and marketing organizations and has experience from more than 30 projects in this context. From his perspective, it is particularly important for sales and marketing organizations to have clear and measurable goals and a clear and comprehensible strategy for achieving them. Subsequently, the focus is on creating an effective, efficient, and self-optimizing organization from the right people, processes, partners, and necessary governance. Technology and data are crucial enablers for leveraging the efficiency and effectiveness of the resources used multiple times. This is essential to be competitive, remain competitive, and develop competitive advantages for the future. However, they are not an end in themselves but always enablers to achieve the goals (better). Sascha Kurth is convinced that building effective and efficient sales and marketing organizations is a crucial long-term competitive advantage for the entire company and that paid advertising (especially increasing the budget) should be one of the last initiatives to achieve strategic goals.

Sascha Kurth has been supporting automotive manufacturers in a global context since 2013. He has extensive expertise in goal-oriented sales and marketing planning, Paid, Earned, Owned- funnel management, data management platforms & customer data platforms, e-commerce platforms, programmatic advertising, customer relation management, smart KPIs, and management dashboards.

Prior to joining Berylls Mad Media, he supported leading OEMs, e-mobility start-ups, telecommunications companies, and fast-moving consumer goods manufacturers in their sales & marketing transformation at various consulting firms.

Don’t fight forces, use them!

Munich, March 2024

Don't fight forces, use them!

Munich, March 2024
E

ffective Pricing Strategies amidst the Global BEV Price War.

Executive Summary

Today, the global automotive industry is faced with an unprecedented realm of pricing challenges characterized by ever escalating price wars that threaten both market stability as well as profitability. In our most recent study, we have analyzed the price developments of the BEV used car market in Europe and its impact on the new car market.

This article will delve deeper into the global trend of falling car prices (new and used) with particular emphasis on effective pricing strategies. Our main aim will be to provide a strong framework for OEMs, captives, leasing companies and everyone involved in car (re-)sale to respond effectively against these price wars using a set of proven levers. We recommend promptly setting up a cross-functional task force to develop and swiftly implement customized pricing strategies suited to different vehicle ranges and models to best profit from the given circumstances during price wars.

Introduction

The global automotive industry is at an inflection point where BEV price wars are active across regions. Triggered by the price cuts that Elon Musk does at Tesla and fueled by discontinued subsidies in countries like Germany and France, this price war has reached substantial proportions. Tesla has slashed new car prices for their models between 2022 and today by between 16% (Model 3) and up to 33% (Model X) in the US.

TESLA LIST PRICES SINCE 2020 FOR THE US, IN USD

Source: Berylls Strategy Adivsors, Car and Driver

Discounts and price cuts are back! After a longer period of high prices due to demand bottlenecks, BEV discounts are about to become the new normal. This is not affecting single brands or segments but can be observed across the board.

TOP 20 DISCOUNTS BY BRAND AND MODEL

Source: Berylls Strategy Advisors

Once a price war has started, it is obviously difficult to act against or even stop it. The trick is to make the best out of given circumstances short-term and to execute the most effective levers out of the pricing toolbox. By doing so, companies will profit from additional effects on profitability despite the negative effects the price war will have without a doubt.

Anatomy of price wars

A price war represents a highly competitive situation in the market. It occurs when a business reduces its prices to attract more customers and increases its market share, leading other competitors to lower their prices as well, to remain competitive.

PRICE WAR – UNDERSTANDING TRAD-OFFS

BEV market is experiencing decreasing prices due to higher sales pressure. The risk of a price war with its vicious cycle is rising. Various opportunities and threats must be traded off precisely by the OEMs.

Source: Berylls Strategy Advisors, Autovista24, part of Autovista Group

Like conflicts among nations, price wars often stem from escalating tensions or significant disparities within the market landscape. The onset of such wars is almost inevitable once these conditions are in place. Price wars do not emerge spontaneously but are the result of various contributing factors and certain triggers:

1. High Market concentration

In industries where a few large corporations dominate, alongside a considerable number of smaller entities, the risk of a price war escalates.

2. New Entrants

To prevent new competitors from gaining a foothold, existing businesses might reduce their prices, thereby intensifying the competition over pricing.

3. SENSITIVITY TO PRICE AMONG CONSUMERS

When consumers frequently switch providers seeking lower prices, companies might engage in fierce price reductions to attract and keep these price-sensitive shoppers.

4. EXPECTATIONS OF MARKET GROWTH

Overly optimistic growth expectations can prompt managers to compete aggressively for a larger share of the market.

5. MINIMAL PRODUCT DIFFERENTIATION

When offerings are seen as similar, there's a higher tendency towards price wars, as with limited options for differentiation, businesses might lean towards cutting prices.

6. IGNORING COMPETITOR REACTIONS

Companies weigh the potential gains from lowering prices against the risk of competitive retaliation. This balance influences whether they decide to lower prices or avoid doing so.

These elements are reliable indicators of the potential for price wars to erupt. In automotive, it is a combination of different triggers, that lead to the current price war. Market concentration is still high, although the number of new OEMs especially from China has considerably lowered it. New entrants are setting new price levels for certain vehicle ranges that are much lower than what was the case before, thereby educating consumers towards low prices. The expectation of high market growth might have influenced the decision of Tesla to lower prices, expecting to gain market share. The same rationale might hold true for especially Chinese manufacturers. Subsidies are being reduced or stopped etc.

Understanding the reasons behind a price war is important as to some extend it influences the possible reactions on the pricing side.

Pricing approaches to price wars

During a price war, businesses often face significant pressure to lower prices to maintain competitiveness, which can lead to a race to the bottom and potentially harm long-term profitability. However, there are several pricing approaches that companies can adopt to navigate through a price war effectively without solely relying on cutting prices.

Choosing the right strategy depends on the company’s market position, product or service offerings, customer base, and overall business goals/ pricing strategy. Before deciding on a set of pricing approaches, the pricing strategy must be clearly defined and the focus on volume vs. margin determined for those products in focus at least.

It’s also crucial to monitor the effectiveness of the chosen strategy and be prepared to adjust as the market conditions change.

Here are the 10 most suitable pricing strategies to use during price wars (of course not only then):

PRICING APPROACHES DURING PRICE WARS
10 most suitable pricing strategies to use during price wars (of course not only then).

Value-based pricing

Emphasize customer value; justify higher prices for select segments.

Instead of competing on price, focus on the value offered to customers. This involves understanding what aspects of your product or service are valued by your customers and setting prices based on that perceived value. By differentiating your offerings, you can justify maintaining higher prices at least for certain parts of the portfolio and selected customer segments.

Premium Pricing

Set higher prices for unique features or superior quality.

Maintain a premium pricing strategy for products or services that offer unique features, superior quality, or exclusive benefits not available from competitors. This strategy relies on branding and market positioning to appeal to customers who are willing to pay more for perceived higher value. This can for example be applied to certain accessories or parts of a vehicle range.

Bundling

Combine products for increased perceived value and sales.

Combine products or services into a package deal at a price lower than the total of each item sold separately. This can increase the perceived value for customers and discourage direct price comparisons with competitors' individual products. Bundling can e.g. be done for cars and service packages (higher margin business).

Typical examples are a bundle of car plus wallbox plus installation or car plus voucher for free power.
Penetration Pricing

Temporarily lower prices to gain market share quickly.

Temporarily lowering prices below competitors to gain market share and attract price-sensitive customers. Once a solid customer base is established, prices can be gradually increased. This strategy requires a careful balance to avoid long-term profit erosion. It can make sense in a situation where a bigger cost advantage exists compared to competition.

Cost-plus Pricing

Price products to cover costs and ensure profit.

Ensure pricing covers costs and includes a margin for profit. This strategy is more about internal cost management than market competition, but it can help avoid selling at a loss during a price war.

Psychological Pricing

Employ tactics to make prices more appealing.

Utilize pricing tactics that make your prices appear more attractive, such as pricing products at $999 instead of $1.000. This can make your offerings seem cheaper without significantly reducing the price. Rounding logics can of course be applied to accessories as well. There are further psychologically driven pricing tactics that can be applied such as “reason discounts”, “prestige prices”, “versioning” etc.

Dynamic Pricing

Adjust prices based on real-time market conditions.

Adjust prices in real-time based on market demand, competitor prices, and other external factors. This requires sophisticated pricing algorithms and data analysis but can help you stay competitive without initiating a downward price spiral.

Loss Leader Strategy

Offer discounted items to attract customers; boost sales of higher-margin products.

Offer one or more products at a loss or very low margin to attract customers into the retail store or onto the platform with the expectation that they will purchase other, higher-margin items.

Customer Loyalty Program

Retain customers with rewards and incentives.

Implement or use existing programs that reward repeat customers with discounts, exclusive offers, or other perks. This encourages customer retention and can help maintain sales volumes without directly engaging in price cuts.

selective price cutting

Lower prices strategically to remain competitive.

Instead of across-the-board price reductions, selectively lower prices on key items that are most sensitive to competition. This can be an effective way to remain competitive on hot-ticket items while maintaining margins on others.

Authors
Thorsten Lips

Partner

Christopher Ley

Partner

Applying these strategies can be complex as there´s no silver bullet in pricing, but it is rather a combination of different approaches that will lead to success.

Different strategies can be necessary for certain parts of the portfolio as well as for the regions or countries. Products are positioned differently, and the strategy might as well be. The regional focus of pricing strategies as well depends on the targets that should be achieved. Local adaptation of measures such as bundling or psychological pricing must be done because of market and customer habits.

What to do next?

From our many years of experience, there are three main mistakes that companies make during price wars:

1. The “do nothing” mistake: Price wars are an uncomfortable situation for managers. You know that you are losing substantial profit, you cannot really stop the price war, nor do you know when it will end. Quite often the reaction is to try and not make it worse by any actions for which the outcome is unknown. Managers simply sit, observe, and wait until the price war is over.

2. The “we must act not, it is serious” mistake: During price wars, companies start losing profits immediately and the effect is getting bigger every day and week. All reports show negative deviations and pressure will be high for management to act. The pricing function in automotive OEMs, captives, leasing companies etc. is still underdeveloped in many cases. Data and tools are not sufficient, processes rather manual than digital and the like. For price war situations often there´s no toolbox existing, that pricing managers can make use of. The result often is a hectic and not well thought about approach with measures that are more driven by pressure than based on a strategy.

3. The “lone wolf” mistake: Of course, there are people that know what to do or at least believe they do. This sometimes results in isolated measures for e.g. a single product, region, or the like. The problem with this is, that spill-over effects to other products or customer segments are not considered. The complexity of pricing measures is simply underestimated because one is looking at a local optimum. The result can sometimes be the opposite of what you wanted to achieve.

Those mistakes must clearly be avoided and there´s a recipe for how to make sure that price wars are being managed in a positive way.

 

Pricing task force

In a first step, we recommend businesses to build a pricing task force for the immediate management of counter actions in a price war. Why task force? Because it is necessary to act quickly and involve resources and data from different departments to work systematically and with high pressure to develop and implement solutions. And because a local optimum of one department is often not enough, but a more global optimum is required.

The task force must identify the most important fields in which measures mustbe implemented first. This can be parts of the portfolio, regions, sales channels,or the like. For each priority field, the situation is analyzed, including competitor activities, purchase behavior of clients etc. Based on this, a pricing strategy is developed, considering volume and profitability aspects. Financial targets must be defined, in a worst-, realistic- and best-case scenario. Based on this, a team of experts from different functional areas such as sales, marketing, pricing, financeetc. will develop measures and evaluate their effect before starting to step-by-step implement. Dedicated reports from the markets in focus will make sure that effects in the market become visible and measures can be adjusted accordingly.

 

Institutionalize

As a second step (or in parallel, depending on resource availability), the taskforce work must be institutionalized. As part of the existing pricing governance and operating model, the necessary elements for price war situations must be added.

The most important elements are to define committees that will be put in placewith a clear governance and a pricing toolbox for the price war situation as well as a dedicated process.

With these two steps, maneuvering through a price war can be done systematically and with maximum impact.

Nota bene: It is obviously the better option to avoid price wars if possible and to make sure that an existing price war can be ended quickly, for example by sending out appropriate communication into the market.

Conclusion

With all these price wars, the global automotive industry is passing through challenging times with threats to decades‘ traditional business models. However, with a systematic and comprehensive approach towards pricing and market positioning OEMs, captives, leasing companies and everyone involved in car (re-)sale can ride the tide in these turbulent times. Formulation of a dedicated task force is thus an important first move to make use of data and pool resources across functions to make better and faster decisions and focus on rigid execution.

Thorsten Lips

Thorsten Lips (1972) is a partner at Berylls Strategy Advisors. He began his career as a management consultant at PricewaterhouseCoopers Düsseldorf in 1998. After spending six years at Malik Management Centre in St. Gallen, Switzerland, he took the cross-industry, global responsibility for Pricing, Sales, Service and Marketing as a partner at Horváth. At Berylls, his area of expertise is Pricing & Revenue Management. This encompasses classical topics like new- and used-car pricing, aftersales pricing and the like. In addition, he is an expert in innovative Pricing and Revenue Management approaches for digital products and services as well as in the field of data-driven Pricing.

Industrial engineering and management studies at the Technical University of Ilmenau and the Technical University of Darmstadt.

EV Startups on the stock market – promise or downfall?

Munich, March 2024

EV Startups on the stock market - promise or downfall?

Munich, March 2024
E

V STARTUPS ON THE STOCK MARKET – A JUSTIFIED HYPE?

In the last five years, many new EV players entered the stock market. Companies like NIO, Rivian, Lucid, VinFast, and XPENG are among the firms in the hunt for fresh capital to fund their ambitious endeavors. Initially, investors seemed to be on the edge of their seats, eagerly anticipating who was going to follow in the footsteps of EV pioneer Tesla. When Rivian went public at the Nasdaq stock exchange in November 2021, it resonated like an earthquake in automotive circles. At an initial valuation of USD 66.5 bn, they were valued at a similar level to established players Mercedes-Benz and BMW, only two months after producing their first ever customer-ready car.

However, despite this initial hype around newly emerging EV players, the recent performance of Rivian and its EV-peers on the stock market is quite underwhelming. While the rise of new electric vehicle manufacturers seemed very attractive for investors from the get-go, popular companies like Rivian, Lucid or Fisker are currently valued at less than 20% of their initial valuation. This underperformance of many emerging BEV players on the stock market raises question marks. Was the hype around EV startup stocks justified?

Download the full insight now!

Berylls Insight
EV Startups on the stock market - promise or downfall?
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Authors
Dr. Jan Burgard

Berylls Group CEO

Arthur Kipferler

Partner & MD UK

Malte Broxtermann

Partner

Björn Simon

Senior Consultant

Jakob Rüchardt

Consultant

Felix Sperl

Consultant

Moritz Nold

Consultant

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.

Arthur Kipferler

Arthur Kipferler (1963) started his career in 1989 at the Boston Consulting Group, where he consulted for 13 years in the automotive industry. After consulting, Arthur Kipferler held senior management positions at Toyota in Europe and the U.S. From 2013 to 2014, he was global head of the BMW Group’s Future Retail program. Subsequently, he had leading roles in strategy, corporate planning and transformation management at Jaguar Land Rover in Coventry, UK. Arthur Kipferler complements the expertise of the Berylls partner team in the fields of market & customer, technologies, sales, and digitalization, as well as in the development and implementation of corporate, product, and regional strategies.

Mechanical engineering, production engineering, at the Technical University of Munich (TUM); MBA in Strategy, Marketing and Organizational Behavior at INSEAD Business School, France.

Malte Broxtermann

Malte Broxtermann (1986) joined the Berylls team in 2014. After extensive experience as emergency medical technician, he has been working in consulting since 2012. He helps customer to leverage digital strategies & products across the entire automotive value chain. He is an expert in deploying machine learning-powered applications. As Partner at Berylls’ own unit for digital solutions, Berylls Digital Ventures, he focuses on scaling start-ups as part of our venturing practice.
Studied economics and international business at Maastricht University (Netherlands) and Queen’s University (Canada).

Leveraging AI in Software Development

Munich, March 2024

Leveraging AI in Software Development

Munich, March 2024
I

n 2023 the hype around artificial intelligence (AI) and specifically GenAI reached its peak.

This can be seen in 2 major aspects. First, the valuation of leading AI companies like Microsoft or OpenAI went through the roof. OpenAI is in early talks to raise a fresh round of funding at a valuation at or above $100 billion¹. Second, the high number of projects that have been launched in the automotive industry across the entire value-chain created a high demand on AI expertise. Companies formed teams or complete organizations defining hundreds of use cases for launching pilot projects to increase the customer experience, create efficiency or support other strategic goals in their company & product strategy.

Berylls Digital & Technology serves as the center of competence AI within the Berylls group. Therefore, we are leveraging AI for our own business, working with customers on projects and observing market developments closely. Over the last 12 months we saw that companies tend to be more cautious with the implementation of GenAI at the beginning. While early pilot projects are often rolled out with standardized services of business software providers, e.g. copilots, later stage GenAI use cases are more customized and developed inhouse or with in cooperation with partners to target specific problems.

Successfully navigating through a plethora of potential use cases as well as implementing the most impactful ones necessitates a robust validation process and significant organizational change. The pace and extent of these transformations are influenced by a company’s strategic decision to either lead as an innovator and first mover or to adopt a fast follower approach. Drawing from this study and our experience in client engagements, we advocate for at least being an early adopter, particularly in integrating Copilots into standard enterprise software. Our observations from numerous projects highlight an immediate beneficial impact: the license costs per user are quickly offset by short-term efficiency gains. Proper integration and customization of these tools within existing processes can further enhance productivity and reduce labor requirements in specific roles.

 

At Berylls, we specialize in guiding automotive car makers and suppliers through their journey from initial exploratory ideation to becoming efficient, scaling organizations.  Indeed, the potential of AI is immense in multiple fields of application, yet we also see a significant number of failed pilots & projects through our work with clients. We will discuss the reasons for failing in AI use cases in another Berylls insights edition in more detail. However, in this article we want to set the focus on an area where AI delivers a significant improvement on speed and efficiency for coding projects: The usage of GitHub Copilot by Microsoft in “real” software development projects.

 

Case Study

The automotive industry is spending over 4 billion euros annually due to poor vehicle launches caused by ineffective project management, missing information, and late execution of measures. As a result, many vehicle launches end up in task force mode. Properly managing these task forces in stressful situations requires full focus, which is why efficient collaboration is essential. Nonetheless, modern processes are complex and multilayered dependencies across departments pose information asymmetries, leading to the distribution of outdated information and time inefficiencies.  

Leveraging our decades of experience in managing task forces at Berylls, we have developed a solution to overcome these challenges. Together with our software development partner Avochoc, Berylls is launching “elyvate”, a digital task force solution custom-built for the automotive industry. This is our digital approach to optimize performance in project and shop floor management.

Our software as a service (SaaS) solution is the next level of task force management and focused on user-friendliness as well as simplicity, ensuring an intuitive experience. elyvate is designed to integrate seamlessly into your workflow, enhancing efficiency without the complexity. It offers an all-in-one reporting solution that includes automated KPI and measure tracking to optimize performance in project and shop floor management. elyvate allows to digitally steer task force projects with ease, proactively plan and follow up on KPIs, implement measures, as well as most importantly, track their efficiency.

Source: Berylls Strategy Adivsors

Through “elyvate”, Berylls provides our customers with a tool to address these challenges.

  • Cloud-based SaaS tool with 24/7 availability across multiple devices.
  • Smart project management and reporting including creation of
    KPI charts, tracking and planning for taskforce project teams.
  • Fast set-up and preconfigured work package structure based
    on project needs.
  • Integration into shop floor and machinery management and reporting systems (in development).

     

During the development phase we jointly decided to leverage AI development support tools as far as possible, not only to make the process more efficient but also to get hands on understanding of the advantages and challenges of these.

Using AI tools in a business context needs clear and robust legal governance model for using such applications. Particularly AI usage must comply with applicable laws and regulations as well as aspects like intellectual property (IP), data protection (GDPR), and business secrets become critical. We will cover this in detail in our latest newsletter. This is especially challenging since the local / regional regulations are just being updated to reflect the questions in IP and data protection.

Today we want to share our experiences leveraging GitHub Copilot by Microsoft.

Our experiences with GitHub and AI features:

Coding can often be a laborious and lengthy process. Nowadays, developers are perpetually seeking innovative methods to enhance their productivity, precision, and efficiency in programming. One tool of choice for development teams is GitHub.

GitHub is an AI-powered developer platform that allows developers to create, store, and manage their code.² Features like access control, bug tracking, software feature requests, task management, continuous integration, and wikis are included in the software. Acquired by Microsoft in 2018, the platform is now used by more than 50,000 organizations and 1.3 million paid subscribers, representing the most broadly facilitated AI developer tool worldwide.³

The GitHub Copilot

Introduced in late 2021, GitHub Copilot represents one of the latest innovations by GitHub. Marketed as an ‚AI pair programmer‘, Copilot employs AI to auto-generate code within your editor. It is accessible as an extension for Visual Studio Code, the JetBrains IDE suite, and Neovim, broadening its usability across different development environments.

GitHub Copilot is an innovative AI tool driven by OpenAI Codex, designed to improve the coding experience for developers. Its primary function is to propose code snippets based on the context within the file, such as function names, code comments, docstrings, file names, cursor position, and more. By simply pressing the Tab key, developers can accept these auto-generated proposals, which are derived from open-source code within GitHub’s public repositories. This AI tool is proficient in numerous common languages including TypeScript, Python, JavaScript, Ruby, among others.

One of the key aspects that sets GitHub Copilot apart from similar tools is the level of control it offers to the users. Unlike other products, GitHub Copilot empowers the user with the flexibility to accept or reject code suggestions, manually modify them, and explore different alternatives. As the user interacts with the tool, it gradually adapts to the coding style, leading to progressively refined and relevant suggestions over time.

A distinctive feature of GitHub Copilot, further differentiating it from other solutions, is its ability to comprehend natural language, encompassing both programming and human languages. This feature is especially beneficial for developers working with unfamiliar frameworks and libraries, as Copilot can navigate through open-source documentation quickly, reducing the need for manual searches.


To maximize the benefits of GitHub Copilot, it is recommended to divide the code into smaller functions, write effective comments and docstrings, and use meaningful names for function parameters. These practices aid Copilot in understanding your intent more accurately.

However, it is important to note that GitHub Copilot does not generate flawless code. While it strives to comprehend the developer’s intent, some proposals may not function as expected or even make sense. It does not test any of the code it suggests, which means the suggested code might not compile or run. Therefore, developers still need to meticulously review and test the code before assuming it’s usable.

In general, GitHub Copilot is likely the best autocomplete tool available, offering a wide array of solutions to problems beyond basic suggestions. The variety of proposals for a code snippet is impressive, often reducing the need to consult external sources like Stack Overflow.

Despite its capabilities, it is crucial to understand that GitHub Copilot is merely a tool and far from replacing human developers. You cannot depend solely on Copilot, and it is still up to the developer to accept the suggestions and make necessary modifications.

Let’s delve deeper into different examples:

GitHub Copilot is able to transform your comments into usable output (executable code), similar to the ChatGPT overlay. Simply by writing a prompt that describes the desired logic, Copilot can automatically generate code suggestions based on that description. As a programmer, you can then easily accept these suggestions with a press of the Tab key.

Consider, for instance, you are crafting a Python function and have included a comment detailing its intended functionality. For Copilot to generate high-quality code proposals, it is vital to write clear and precise comments and docstrings. Ambiguous or poorly written comments can pose a challenge for Copilot in accurately grasping your intended functionality.

GitHub Copilot can immensely cut time spend for coding, especially when it comes to speeding up the writing of repetitive code segments. When dealing with large blocks of standard code, simply providing a few examples of the desired pattern is enough. Copilot then efficiently handles the rest, streamlining the coding process.

As previously stated, GitHub Copilot does not perform testing on the code it generates. Nonetheless, it can be used to recommend tests that are compatible with your code implementation. This provides an effective way to quickly incorporate a test unit package. While it is still necessary to verify the logic and functionality of the code, using Copilot for this purpose offers a faster option compared to writing the test code entirely on your own.

This scenario is perhaps the most effective use of Copilot. It acts as a crucial aid for developers using an unfamiliar language or framework. Imagine, for example, you wish to create a specific function in a new programming language. The approach to coding can vary greatly based on the language you are using. Even if you have some proficiency in this new language, the autocomplete feature of Copilot remains a significant time-saving tool.

Our experienced developers have found great value in using Copilot while delving into languages they are not familiar with. Although Copilot’s suggestions may not always be perfect, they often accurately capture the basic syntax. Furthermore, it guides users towards common programming idioms, library functions, and more. Copilot can even function as a self-teaching tool for programmers, aiding in their learning process.

Developers frequently know precisely what needs to be done but sometimes overlook the finer details of the process. For example, they might need to normalize matrices or create complex functions with particular parameters. Copilot’s autocomplete feature enables developers to concentrate on the method, while Copilot handles the completion of the code. This capability saves developers valuable time, as they do not have to consult books or websites to look up methods.

Since copilot makes use of a lot of historical data, it also has an in depth understanding on which tools developers use. As tech evolves, so do the tools the developers use. Generally, the way of accomplishing certain tasks stays relatively consistent, with small changes in function names or syntax. As Copilot has insight to this, it can generate the correct code if guidance is given.

Much of the functionality in the software realm is possible, because computers adhering to specific sets of rules for communication, commonly known as protocols. Among the most prevalent protocols are RADIUS (for your ISP to grant internet access), CSMS (to communicate with electric vehicles), TCP/IP (for reliable data transmission over the internet), etc. While these protocols are thoroughly documented, they often encompass hundreds of pages, necessitating extensive reading for developers to implement them. Copilot, however, can adeptly predict the methods developers should use and accurately assist in implementing these protocols.

As copilot has context of the code, it is able to correctly predict which functions and variables need to be used for the next part of the code. This assists developers by reducing cross referencing in their own code base, allowing the development to be streamlined.

Hands-on Insights:

While it is not strictly necessary to do this before using Copilot, it is highly beneficial to define the purpose and objective, especially if you are new to the tool. Avoid diving into GitHub Copilot with a “let’s just see what happens” attitude. This could lead to confusion and prevent you from fully utilizing the tool’s capabilities. Once you have determined how you intend to use Copilot for your upcoming project, the subsequent steps will be much simpler.

Many coders utilize GitHub Copilot when they have a clear picture of what they want to create but might need to deal with a programming language they are not familiar with. Copilot then assists them in getting the syntax correct and understanding basic library functions.

GitHub Copilot is not a standard feature of many programming platforms and their editors. Therefore, you will need to register and install the extension before you can begin using it. The platform offers different subscription packages⁴, choose which option suits your needs best.

After installing the extension, Copilot will ask you to authorize the plugin by logging into GitHub. Once authorized, you should be automatically redirected back to the editor.

As you write, GitHub Copilot will start to automatically suggest autofill options based on the context. It is your decision whether to accept or reject these suggestions. If you are not satisfied with what Copilot is suggesting, you can always view other suggestions to see if they are more applicable.

It may take some time to get used to Copilot, but with more usage, you will become more comfortable with the suggestions as well as the Copilot building those based on your objective.

As mentioned earlier, Copilot is not flawless. Therefore, you cannot blindly accept the suggestions and assume they are perfect. You will probably need to make adjustments to the code. As always, you should run tests before incorporating the code into your project.

GitHub evaluated Copilot’s accuracy by reviewing a set of Python functions in open-source repositories. They removed the function bodies and asked Copilot to fill them in. Copilot correctly completed the functions 43% of the time on its first try. When Copilot was given 10 attempts, the code was correct 57% of the time.⁵ Our experiences were slightly better but still manual checks and adaptations are a must do.

While copilot can drastically improve a developer’s workflow, as it really shines with trivial repetitive tasks, this only holds when a developer can properly guide it. Copilot cannot solve new problems, but it can save hours in repetitive tasks and documentation reading.

Since the tool is always trying to suggest potential edits based on the code you build, it might not unleash its full potential. For example, in the hands of a strong developer, copilot is a tool that will save the developer hours of time. In the hands of an inexperienced developer, the suggestions may be unsecure and may cause the developer to take longer to complete a task as they would need to do more debugging than usual.

As the AI tool is trained with public data and code, discussions arose about potential copyright / IP infringement by GitHub CoPilot over the last months in the US. Dating back to a claim from November 2022, a judge looked into these claims which will have a significant impact on GitHub and other AI large language models (LLMs), but potentially also your generated code by the Copilot.

These claims represent developers’ allegations of the algorithmic reproduction of their source code by CoPilot, filed against GitHub, OpenAI, and Microsoft. Some cases have been dismissed, yet there is still a high risk of infringement. In fact, the judge allowed three damage claims so far, which gives room for more as well as anticipated changes to the services of Copilot in the future.

Do not miss this opportunity to revolutionize your business with AI technology! Take the first step towards a transformative journey and discover how our cutting-edge automotive reference projects at Berylls can enhance your business processes. Act now and contact us to explore a world of possibilities with AI – Let’s innovate together.

For more insights go to:

Github

We will cover governance models for AI usage in business context in detail in our latest newsletter.

About AvoChoc

At AvoChoc, since our inception in 2015, we have been dedicated to delivering unparalleled digital experiences that captivate audiences and elevate businesses across diverse sectors. Our expertise in experience development, blending artistic vision with technological prowess, allows us to create exceptional web designs and complex systems. Our diverse portfolio includes work in education, medical, children’s development, coding for kids, manufacturing, clean energy, electric vehicles, sports, and private security, highlighting our versatility and commitment to innovation.

We extend our services beyond technical solutions, providing business consulting and boasting an in-house team of UI/UX designers. This ensures holistic insight and design excellence in every project. Our dedication to exploring the latest tech, frameworks, libraries, and languages keeps us at the forefront of technology, enabling us to offer the most advanced and effective solutions to our clients.

About Berylls Digital & Technology

The Berylls Group unites expertise in strategy consulting, data-driven marketing transformation, venture building and equity investing. We focus exclusively on what we call the global automobility sector – because we believe that today’s automotive industry is about much more than the manufacturing and selling of cars.

Berylls Digital & Technology, for instance, is dedicated to the digital consulting & project execution and scaling of digital products. Our two focus areas are consulting in the area of software-defined vehicles (SDV) and the execution of software taskforce projects, safeguarding projects that are in distress. With our strong set of external partners, we are uniquely positioned to serve our customers, “but different”.

Our focus on digital innovation and its commitment to driving advancements in the automobility sector demonstrate our role as a transformative force in this industry, particularly through our technological and digital offerings.

Notes:
¹ Bloomberg: https://www.bloomberg.com/news/articles/2023-12-22/openai-in-talks-to-raise-new-funding-at-100-billion-valuation
² Wikipedia: https://en.wikipedia.org/wiki/GitHub
³ Microsoft: https://www.microsoft.com/en-us/Investor/events/FY-2024/earnings-fy-2024-q2.aspx
⁴ Github: https://github.com/features/copilot/plans
⁵ Medium: https://medium.com/codex/what-is-github-copilot-6c3e99ba7c41

Author
Christian Kaiser

Partner & Head of IT

Christian Kaiser

Christian Kaiser (1978) is partner and Head of IT at Berylls Group with focus on software and connectivity. He began his career with Daimler AG in 1997. He brings 26 years of industry and consulting experience in the automotive industry serving in various executive roles at OEMs and software companies.

At Berylls, his area of expertise is software development & architecture, digital business models, digital operating models and ADAS/AD.

Vehicle to Grid Readiness Worldwide

Munich, February 2024

Vehicle to Grid Readiness Worldwide

Munich, February 2024
I

n the worldwide movement towards carbon neutrality Germany aims to reach 80% in renewable electricity share by 2030 from around 50% in 2023.

This increased share of renewable energies (wind, solar and hydro) also necessitates temporary storage of electric energy to stabilize the electric grid. A prominent and cost-effective way to increase storage capacity drastically and thereby stabilize energy supply is the integration of electric car batteries into the electricity grid. The method to not only charge car batteries from the electric grid, but also supply energy back from the car to households or factories through grid is known as V2G (vehicle to grid).

V2G serves as an alternative to other grid stabilization options such as pumped storage power plants, with few suitable locations left, or the significantly more expensive stationary battery storage. In the long run, commercial returns from V2G can reduce the total cost of ownership of an EV through reduction in charging and overall electricity bill.

The V2G score corresponds to the readiness of a country to utilize V2G potential. The most significant factors for the same are smart meter rollout (to enable bidirectional energy flow between EVs and grid) and share of V2G capable EVs in the fleet. The study shows that the V2G potential in most countries is not limited by smart meter roll-out, but the amount of available V2G capable vehicles. It also strikingly shows that Germany is significantly behind the leading nations in terms of V2G readiness. This is mainly due to a very low smart meter rollout in the country so far (around 1% of all household are equipped with a smart meter currently). The smart meter rollout in Germany was slowed down in the past by regulatory uncertainties and a lack of dynamic electricity pricing models requiring the smart meters. In the beginning of 2023, a new law came into place requiring a 95% smart meter rollout by 2032.

So far V2G has only been demonstrated through pilot projects and studies. For unleashing its true potential, both electrical and electric vehicle (EV) infrastructure of a country plays a prominent role. For example the amount of required charging points is increased, as vehicles serving as grid stabilizers block the charging point for this time.

If you want to discuss the opportunities and challenges that come with V2G, please feel free to contact Dr. Alexander Timmer.

Highlights 

  • In the worldwide movement towards carbon neutrality Germany aims to reach 80% in renewable electricity share by 2030 from around 50% in 2023. This increased share of renewable energies (wind, solar and hydro) also necessitates temporary storage of electric energy to stabilize the electric grid.

     

  • A prominent and cost-effective way to increase storage capacity drastically and thereby stabilize energy supply is the integration of electric car batteries into the electricity grid. The method to not only charge car batteries from the electric grid, but also supply energy back from the car to households or factories through grid is known as V2G (vehicle to grid).

     

  • V2G serves as an alternative to other grid stabilization options such as pumped storage power plants, with few suitable locations left, or the significantly more expensive stationary battery storage.

     

  • In the long run, commercial returns from V2G can reduce the total cost of ownership of an EV through reduction in charging and overall electricity bill.

     

  • The V2G score corresponds to the readiness of a country to utilize V2G potential. The most significant factors for the same are smart meter rollout (to enable bidirectional energy flow between EVs and grid) and share of V2G capable EVs in the fleet.

     

  • The study shows that the V2G potential in most countries is not limited by smart meter roll-out, but the amount of available V2G capable vehicles. It also strikingly shows that Germany is significantly behind the leading nations in terms of V2G readiness. This is mainly due to a very low smart meter rollout in the country so far (around 1% of all household are equipped with a smart meter currently).

     

  • The smart meter rollout in Germany was slowed down in the past by regulatory uncertainties and a lack of dynamic electricity pricing models requiring the smart meters. In the beginning of 2023, a new law came into place requiring a 95% smart meter rollout by 2032.

     

  • So far V2G has only been demonstrated through pilot projects and studies. For unleashing its true potential, both electrical and electric vehicle (EV) infrastructure of a country plays a prominent role. For example the amount of required charging points is increased, as vehicles serving as grid stabilizers block the charging point for this time.
Berylls Insight
Vehicle to Grid Readiness Worldwide
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Authors
Dr. Alexander Timmer

Partner

Lars Behr

Senior Consultant

Rishab Harlalka

Consultant

Dr. Alexander Timmer

Dr. Alexander Timmer (1981) joined the Berylls Group, an international strategy consultancy specializing in the automotive industry, as a partner in May 2021. He is an expert in innovation and market entry strategies and can look back on many years of experience in the operations environment.
Dr. Alexander Timmer has been advising automotive manufacturers and suppliers in a global context since 2012. He has in-depth expert knowledge in the areas of portfolio planning, development and production. His other areas of expertise include digitalization and the complex of topics surrounding electromobility.
Prior to joining Berylls Strategy Advisors, he worked for Booz & Company and PwC Strategy&, among others, as a member of the management team in North America, Asia and Europe.
After studying mechanical engineering at RWTH Aachen University and Chalmers University in Gothenburg, he earned his doctorate in manufacturing technologies at the Machine Tool Laboratory of RWTH Aachen University.

Quo Vadis, China 2024 – A rat race with no end in sight

Munich, February 2023

Quo Vadis, China 2024 - A rat race with no end in sight

Munich, February 2024
2

023 was a highly turbulent year for the Chinese auto market, which saw it engulfed in a vicious circle – a “rat race” with no end in sight and price wars as the weapons of choice.

In the following insight report, we want to explore this rat race in greater detail and provide an outlook for 2024, including the challenges that lie ahead as well as the focal points of foreign OEMs in the highly complex Chinese market.

RECAP 2023

“卷” or the involution of the Chinese auto market Overall performance

The term “卷” (spelled “Juǎn” in Chinese Pinyin) was undoubtedly the prevailing expression in the Chinese automotive market in 2023. It is understood to mean “involution” or “rat race,” depicting a scenario in which all market participants are entangled in an intense battle for market share with no foreseeable conclusion.

And that exactly describes the Chinese auto market with the emergence of a price war as the ultimate solution, while favorable governmental subsidies are on the way out – a vicious circle.

Curious? Download the full insight now!

Berylls Insight
Quo Vadis China 2024 - A rat race with no end in sight
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Authors
Dr. Jan Burgard

Berylls Group CEO

Willy Wang

Managing Director China

Lois Yang

Consultant

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.

Pressemitteilung: Wachstumsmarkt China bekommt Risse

München, Januar 2024

Pressemitteilung: Geschäftsmodell China bekommt Risse

München, Januar 2024
G

eschäftsumfeld der Zulieferer trübt sich in diesem Jahr ein, nach spürbarem Aufwind bei Umsatz und Marge im Jahr 2023.

  • Berylls-Rück- und Ausblick auf die Zuliefererbranche: 2024 wird erneut ein herausforderndes Jahr.

  • Die ersten drei Quartale 2023 waren eine Phase der Zuwächse bei den weltweit größten Zulieferern, Umsatz und Marge stiegen teilweise signifikant. Bereits in Q4 2023 trübten sich die Bedingungen ein, dieser Trend wird 2024 fortbestehen.

  • China bleibt größter Fahrzeugmarkt, aber bedingt durch die Währungsschwäche, die zunehmende Komplexität der Beziehungen zu China und Entscheidungsfindungen vor Ort, bekommt das positive Bild Risse.

  • Osteuropas Bedeutung für die Automobilindustrie ist hoch und wird weiterwachsen.

  • Steigende Lohnkosten in der Region und geopolitische Risiken, machen Standortentscheidungen zu Osteuropas Gunsten, jedoch zunehmend schwieriger.

  • Berylls-Experten sehen wachsende Relevanz von Zulieferer-Produktionsstandorten in Nordafrika.

Jetzt die gesamte Pressemitteilung herunterladen!

Berylls Pressemitteilung
Pressemitteilung: Wachstumsmarkt China bekommt Risse
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Dr. Alexander Timmer

Dr. Alexander Timmer (1981) ist seit Mai 2021 als Partner bei der Berylls Group tätig, einer internationalen und auf die Automobilitätsindustrie spezialisierten Strategieberatung. Er ist Experte für Innovations- und Markteintrittsstrategien 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.

Status Quo Automobilproduktion in Deutschland

Müchen, Januar 2024

Status Quo Automobilproduktion in Deutschland München, Januar 2024

B

erylls erwartet für 2030 ein Produktionsvolumen von 5,2 Millionen Fahrzeugen – unter starkem Vorbehalt.

  • Berylls-Experten erwarten, dass die deutsche Automobilproduktion in den nächsten Jahren deutlich stärker wächst als das BIP. Das Wachstum generiert Tesla, nicht die deutschen OEMs.
  • Die Abhängigkeit vom Premiumsektor und die Gefahr für Produktionsverlagerungen ins Ausland, sind Risikofaktoren für das Wachstum.
  • Im Vergleich zu den aktuellen Stückzahlenprognosen bis 2030 erwartet Berylls im Idealfall einen weiteren Anstieg von 13 Prozent. 
  • Stellen sich die erwarteten positiven Effekte nicht ein und sinkt das Volumen, kann im Worst Case mit einem negativen Effekt auf das BIP von knapp zwei Prozent gerechnet werden.
  • Die Weichen müssen heute in die richtige Richtung gestellt werden, die Entbürokratisierung gehört zwingend dazu.

Zum Jahreswechsel 2023/2024 prägt Pessimismus die deutsche Wirtschaft, zumindest, wenn man dem Institut der deutschen Wirtschaft (IW) glaubt. Die Gründe dafür sind vielschichtig. Zu ihnen gehören die schwächelnde Weltkonjunktur, Zinserhöhungen, aber auch Unklarheiten beim Bundeshaushalt. Zudem schwindet das Vertrauen in den Standort Deutschland, nicht zuletzt das abrupte Ende der E-Autoförderung trägt dazu bei. Wenig verlässliche Rahmenbedingungen und der Fachkräftemangel machen es schwierig, optimistisch auf das Jahr 2024 zu blicken. Die Berylls-Experten sehen dennoch Anlass zumindest für vorsichtigen Optimismus in der Automobilbranche.

Denn nach vielen Tiefschlägen in der jüngeren Vergangenheit, ist die deutsche Automobilindustrie wieder auf einen Wachstumspfad eingeschwenkt. In den kommenden Jahren wächst die deutsche Fahrzeugproduktion mit 2,5 Prozent jährlich deutlich stärker als das reale Bruttoinlandsprodukt (BIP) mit prognostizierten 1,4 Prozent pro Jahr. Setzen wir dieses Wachstum an, werden im Jahr 2030 in Deutschland 5,3 Millionen Fahrzeuge produziert, im vergangenen Jahr waren es 4,3 Millionen. Bis 2030 wird ein Wachstum von 24 Prozent erwartet, das klar über dem von China liegt. Die dortige Steigerung der Fahrzeugproduktion wird im gleichen Zeitraum bei 17 Prozent liegen.

Figure 1: Vergleich Wachstum Fahrzeugproduktion und BIP

Anmerkung: TOP 25 Länder nach Fahrzeugproduktion, bereinigt um Russland und Iran
Quelle: Berylls Strategy Advisors, S&P Global

Die für Deutschland gegebene Produktionszahl stellt allerdings einen Mittelwert dar, der in einem Korridor mit erheblicher Bandbreite liegt. Denn die Automobilindustrie am Standort Deutschland steht gleich vor zwei großen Herausforderungen. Zum einen vor ihrer Transformation in Richtung e-Mobilität und zum anderen vor industriepolitischen Verwerfungen. Zu denen gehören die Kriege in der Ukraine und im Nahen Osten, aber auch der zunehmende Markt-Protektionismus in den verschiedenen Weltregionen.

Produktionsverlagerungen und negative Auswirkungen auf die Geschäftsmodelle können die Folgen sein. Sie würden die Inlandsfertigung um bis zu 32 Prozent schrumpfen lassen, wie die Berylls-Analyse nahelegt. Im Best Case allerdings, werden hierzulande im Jahr 2030 sechs Millionen Fahrzeuge produziert, ein Plus von 13 Prozent gegenüber dem angenommenen Mittelwert. Tatsächlich steigt das Produktionsvolumen aber nicht bei den einheimischen OEMs, sondern nahezu ausschließlich bei Tesla im Werk in Grünheide. Die deutschen Hersteller planen im Mittelwert mit keinem Wachstum der lokalen Produktion und sind zudem stark von den Entwicklungen im Premiumsegment abhängig.

Figure 2: Anteil von Premiumfahrzeugen und OEMs an Gesamtproduktion

Anmerkung: Top 15 Länder nach Fahrzeugproduktion
Quelle: Berylls Strategy Advisors, S&P Global

Problematisch für die heimische Industrie sind zudem Hersteller, die sich im nahen europäischen Ausland niederlassen. Hier mag beispielhaft die Ankündigung von BYD genannt werden. Der chinesische Hersteller plant ein Werk in Ungarn und wird von dort Europa mit vergleichsweise erschwinglichen Fahrzeugen versorgen. Um dem Standort Deutschland auch in Zukunft eine angemessene Bedeutung zu sichern, wäre es aber wünschenswert, wenn in hiesige Produktionsstandorte investiert werden würde oder wenn neue Hersteller, analog zu Tesla, ihre europäische Produktion in Deutschland ansiedeln.

Es wäre die Aufgabe eine engagierten Industriepolitik dafür die Weichen zu stellen. Dazu gehört ganz sicher eine Entbürokratisierung vieler Prozesse. Als wenig hilfreich sehen die Berylls-Experten dagegen die zeitlich begrenzte Einführung eines Industriestrompreises.

Schrumpft die Automobilindustrie in Deutschland, hat das unmittelbare und erhebliche Auswirkungen auf das BIP. Schon das von Berylls prognostizierte Worst Case Szenario, mit dem Produktionsrückgang von 1,7 Millionen Fahrzeugen bis 2030 (gemessen am Mittelwert), hätte einen negativen Effekt auf das BIP von 1,6 Prozent. Um diesem Abschwung vorzubeugen, sind alle relevanten Akteure aufgefordert wirksame Gegenmaßnahmen zu ergreifen. Die OEMs allein, können dies nicht bewerkstelligen.

Figure 3: Prognostizierte Fahrzeugproduktion und Szenarien in Deutschland

*) Ausprägung abhängig von Szenario, mit oder ohne Risiko von Verlängerungen
Quelle: Berylls Strategy Advisors, S&P Global

Die gesamte Studie auch zum Download.

Berylls Insight
Status Quo Automobilproduktion in Deutschland
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Autoren
Stefan Schneeberger

Project Manager

Samuel Schramm

Consultant

Successful transformation starts at the top: the importance of good leadership

Munich, December 2023

Successful transformation starts at the top: the importance of good leadership Munich, December 2023

A

total of 7 Chinese car manufacturers presented themselves impressively at the IAA with large stands and high-quality, innovative vehicles. However, brands such as Fiat, Peugeot and Jeep were not represented. The profound change in the automotive industry cannot be denied.

The industry is undergoing massive changes that go beyond new drive concepts and designs and lead to a reorganization of brands and market shares in Europe and worldwide. The uncertainty in the German automotive and supplier industry is noticeable, and managers must actively shape the transformation to remain competitive. 

In the midst of transformation processes towards electric drives, agile supply chains and autonomous vehicle technologies, a better balance is needed between leadership and management. Management controls and monitors the present. It focuses on business processes, plans budgets and organizes the necessary resources. Leadership, on the other hand, focuses on future viability. It creates an environment and a culture in which the company can be successful in the long term by breaking down rigid thought patterns and motivating employees to help shape the change. 

However, there is no standardized definition of leadership, and it requires regular discussion so that individual scope for interpretation can come together. The basic prerequisite is a shared understanding of leadership attitudes and mindsets within the leadership team. This significantly impacts the way they make decisions, treat their employees, and shape the corporate culture. Without debate and reflection within the leadership team, individual mission statements develop and inevitably lead to contradictory behavior and decisions. For example, a „charismatic manager“ or a „good coach“ is not automatically a strong leader. There is no doubt that these are desirable qualities. However, they can also be a risk for a company, as seen in the DeLorean Motor Company in the early 1980s. Its founder, John Z. DeLorean, was a charismatic but controversial engineer who quickly gained fame and influence at General Motors and is still considered the youngest department head in the company’s history. Through his courage, self-confidence, and innovative spirit, he quickly made a name for himself outside the automotive industry. However, his business practices, his personal lifestyle and his financial and strategic decisions quickly led to problems and ultimately to the collapse of the company. 

If charisma alone is not enough to successfully transform a company, what are the decisive elements?  

Our observations reveal that successful leadership teams possess five specific characteristics, drawing inspiration from Jim Collins‘ principles: 

1. „Entrepreneurial spirit“ characterizes managers who are distinguished by a unique combination of two essential qualities. Through personal humility, they focus on teamwork and devote their ambition to the good of the organization rather than their own personal recognition. In addition, they are highly committed to the long-term success of the organization through professionalism, high work ethic, high standards and willingness to take tough decisions. 

Eiji Toyoda is an example of true „entrepreneurial spirit“. During his 15-year presidency, Toyota became one of the leading automobile manufacturers, setting new standards for quality, efficiency, and continuous improvement. Rather than personal enrichment or self-promotion, Eiji’s focus was on improving the company and promoting the Toyota Production System. 

2. „Fanatical discipline“ involves setting a clear performance framework that must be demanded and adhered to with the utmost rigor. Even under the most unfavorable conditions, no restraint is granted, even if it seems tempting due to short-term profits or external pressure.  

Although his disciplined approach is not without controversy, and his leadership style attracts both admiration and criticism, Elon Musk is a living example of fanatical discipline. His enthusiasm and dedication to his products became clear in 2018. During this time, there were reports that he slept on a couch in the factory to monitor production processes and intervene immediately in the event of problems to achieve the ambitious production increases.

3. „Empirical creativity“ encompasses the relentless urge to first subject innovative ideas with experiments, facts and figures. Instead of putting extensive resources into an idea from the outset, the „bullets first, cannonballs later“ approach is pursued. 

For centuries, „Hongbao,“ traditional red envelopes filled with money, have been cherished in Chinese culture, especially during Chinese New Year. In 2014, Tencent transformed this tradition by introducing a digital version on WeChat. In an advertising campaign, around EUR 70 million was digitally distributed, marking the success of this innovation. This breakthrough paved the way for WeChat Pay, allowing users to link their bank accounts for seamless digital transactions. The founder, Allen Zhang, is integral to WeChat’s cult-like success in China, akin to Steve Jobs in the USA and Europe, with a staggering 1.3 billion active users. 

4. „Productive paranoia“ aims to identify and anticipate future challenges and problems at an early stage before they occur and the ability to react decreases. Productive paranoia represents a sensible form of prevention and risk management. The key motivation of leaders with productive paranoia is not to take past success for granted and remain self-satisfied. Instead, they think about what dangers may lurk in the future and what reserves need to be built up for protection in the form of time, money or even knowledge. 

Alan Mulally, the former CEO of Ford Motor Company, became known for his pragmatic approach to the automotive business and his use of big data for decision making. Unlike GM and Chrysler, Ford did not have to turn to the US government for funds from the Troubled Asset Relief Program (TARP) during the financial crisis of 2008/2009With empirical data and well-founded analyses, Ford had already prepared itself for economically uncertain times and reacted early to changing consumer preferences with more economical models, such as the Superior Fuel Economy Package of the Ford F150 in 2009. 

5. „Radical Candor” is a catalyst for transformation by encouraging controversial thinking and creating an environment that values diverse perspectives. Conventional thinking is broken, and innovative solutions are identified by encouraging active listening and open conversations. Conflicts are not seen as an obstacle to be avoided, but as a source of creative tension for collective learning and growth. With curiosity and openness, leaders lead through conflict to solutions.  

 

Netflix embodies radical candor, with a culture deeply ingrained in seeking a „diversity of thought.“ Originating from Reed Hastings, co-founder and CEO, this conviction is rooted in the belief that diverse perspectives foster creativity and enable agile adaptation to changing conditions. Netflix actively encourages debates, where decisions prioritize the quality of proposed solutions over authority or charisma. The company operates on the principle that the best idea, regardless of its origin, prevails. Embracing „Fail Fast and Learn,“ Netflix recognizes that not every idea succeeds, fostering experimentation and risk-taking crucial for innovation. In acknowledging that failure is a natural part of the process, individuals are not solely held responsible for setbacks, contributing to a culture of continuous improvement.  

The escalation of competition from the Far East is not a passing challenge but the emerging norm. The demand for continuous competitiveness and innovation places unrelenting pressure on companies and their managers. Resilience is key. For leaders steering their companies through transformative times, the emphasis is not on embodying all leadership characteristics individually. Instead, the goal and challenge lie in cultivating and fostering these qualities within the leadership team. 

Successful leadership teams create trust as the basis for all actions

Leadership teams wield numerous levers to navigate effectively. They must inspire through their actions, setting an example for others to follow. Establishing a culture of openness requires the management team’s receptivity to feedback, offering employees a platform for expression. Personnel decisions, serving as guides for valued behaviors, necessitate a commitment to entrepreneurial thinking. This, in turn, demands the creation of structures fostering innovation, risk-taking, and efficient problem-solving. Actively shaping the organization enables the desired culture to flourish. Transparent resource distribution clarifies priorities, fostering not only understanding but also trust. Trust, the cornerstone for effective collaboration, forms the basis upon which a culture of success is constructed. By proactively engaging with these levers, managers not only shape the present but also chart the course for the future of the company.   

Good managers are made, not born

Continuous training and development are indispensable for managers to keep pace with evolving requirements and successfully guide their companies. While empathy and a commitment to personal development are prerequisites for managerial suitability. Further, essential leadership skills can be honed through targeted training, encompassing active listening, adept handling of resistance and conflicts, and the ability to make tough decisions.  

As challenges confronting management teams multiply, skills such as decision-making under uncertainty and maintaining operational effectiveness gain prominence. Shifting away from the mere „management“ of existing standards and plans, managers must rethink strategies for the future. Regular self-reflection on leadership performance becomes imperative for continuity and personal growth.  

At Berylls, we offer support to management teams and executives in identifying strategic areas of focus and deriving actionable insights for leadership aspirations and performance. Our commitment extends to providing comprehensive assistance through team development, coaching, and capability building. 

Discover how Berylls can elevate your leadership team through tailored development programs. Navigate to our website for more information on our comprehensive support. 

Authors
Laura Kronen

Partner

Peter Eltze

Partner

Peter Nuck

Project Manager

Laura Kronen

Laura Kronen (1980) is a partner at Berylls Group with a focus on transformation. She is passionate about moving people and organizations forward. With over 18 years of industry and consulting experience, her focus is on transformative challenges in the operations context – from executives to individual employees, at manufacturers and suppliers. She helps her clients align strategy, structure, and culture in their respective market environments to build resilience.

Prior to joining Berylls, Laura Kronen worked at PwC Strategy&, Volkswagen AG and Audi. She holds a diploma degree in industrial engineering from the Karlsruhe Institute of Technology (KIT).

Peter Eltze

Peter Eltze (1964) joined Berylls Strategy Advisors as a Partner in November 2015. He began his career in the medical technology division of an integrated technology corporation, and became a project manager at Malik Management Zentrum St. Gallen in 1996 before being appointed Partner in 2001. From 2003, in his role as member of the executive board, he was in charge of Management Education & Development. Since the end of the 1990s, Peter Eltze has advised companies in the automotive and mechanical engineering industries. At Berylls, his consulting activities focus on integrated organizational development (strategy, structure, culture), transformation management, and executive development.
Education in wholesale and international trade; administrative sciences at the University of Constance, Germany.