he automotive industry is at a structural turning point. For decades, growth masked inefficiencies: after the financial crisis, OEMs rebuilt their sales and marketing organizations, adding layers of regional and national headcount to capture rising volumes.
The transformation imperative is being fueled by four powerful forces:
Together, these forces mean that traditional sales structures—often centralized, overlapping, and headcount-heavy—are no longer fit for purpose.
Deep Dive Declining Sales:
The end of growth through growing competition drives the necessity to reorganize Sales Organization across the entire sales chain
¹ Top-12 OEM established OEMs including Toyota, VW Group, Hyundai, Renault-Nissan-Mitsubishi, Stellantis, GM, Ford, Honda, Suzuki, BMW, Mercedes, Mazda
Source: AlixPartners / Berylls by AlixPartners analysis; S&P(IHS)
“Streamlining retail standards across corporate groups and maintaining tight budget control are becoming essential for operational efficiency and profitability.”
- CSO, Volume OEMThe Sales & Marketing organizations of the Top-12 established OEMs employ around 95,000 people today. But the landscape is shifting fast. With declining sales volumes, overcapacities are becoming visible – an estimated 7% of roles are at risk. In parallel, efficiency gains of about 8% can be unlocked through new operating models, automation, and the increased use of digitalization and AI.
However, the picture is not only about reductions. Roughly 2% of future demand will be created by the need for new capabilities – in areas such as AI, data analytics, and digital expertise. This signals a clear direction: while traditional roles will decline, demand for tech-driven skills is growing rapidly.
In total, the expected future demand is around 84,000 FTEs, reflecting a net decrease of 12%. The implications are clear – OEMs will need to actively manage this transition, balancing efficiency gains with investments in reskilling and capability building. At the same time, further job losses are likely to occur at service providers, as OEMs continue to optimize their own headcount by outsourcing.
Estimated own Sales & Marketing FTE of Top-12 established OEMs1 and future demand (in k FTE)
¹ Top-12 OEM established OEMs including Toyota, VW Group, Hyundai, Renault-Nissan-Mitsubishi, Stellantis, GM, Ford, Honda, Suzuki, BMW, Mercedes, Mazda
Source: AlixPartners / Berylls by AlixPartners
At the same time, market dynamics are diverging. Regional regulatory frameworks, shifting customer expectations, and competitive pressures demand more localized, agile approaches. OEMs face a dual challenge: reduce structural overcapacity while equipping organizations with the digital and analytical skills needed to compete in a more fragmented, data-driven environment.
To respond, OEMs are experimenting with new organizational blueprints:
1. Market-led – full local ownership and accountability, giving national sales companies (NSCs) end-to-end responsibility.
2. Region-led – consolidated regional hubs with lean field structures, balancing efficiency with local responsiveness.
3. HQ-led – centralized control with AI-enabled processes, shifting many functions directly to HQ for scale and cost advantages.
Source: AlixPartners / Berylls by AlixPartners
Each archetype comes with trade-offs. The right choice will depend on market exposure, product portfolio, and the degree of control OEMs want to retain over pricing and customer data. But across all models, the trend is clear: leaner structures, fewer overlaps, and stronger digital enablement.
Rightsizing should not be equated with simple headcount reduction. While efficiency gains will reduce structural costs—AI-driven automation alone could replace up to 8% of current sales roles—the true opportunity lies in capability building. OEMs must reinvest savings into future-critical skills:
In this context, rightsizing is less about cutting fat and more about building muscle: creating lean, capability-driven sales organizations that can outperform in a digital-first, regionally fragmented market.
The future sales operating model will combine the best of both worlds—dealers, direct-to-consumer, and agency approaches—tailored by market. It will decouple regional development, allowing greater autonomy where needed, while leveraging AI, automation, and data-driven processes at scale.
OEMs that succeed will not only reduce costs but also unlock efficiency gains, improve customer retention, and ensure they remain competitive in a world where new entrants and tech-driven players are redefining the rules of automotive sales.
The end of growth as usual means OEMs can no longer afford bloated, overlapping structures. Rightsizing is inevitable—but its true value comes when it is combined with capability building. By aligning organizational size with market realities and reinvesting in digital skills, OEMs can transform sales organizations from cost centers into competitive weapons.
The winners of tomorrow will be those who move fastest today: slimming down, smartening up, and preparing their salesforce not just for survival, but for sustained advantage in a transformed industry.
or years, automotive OEMs have looked to new (digital) profit pools—subscriptions, in-car services, and data monetization— beyond the traditional vehicle sales as the next frontier of growth.
“Most experiments have failed or remained marginal, especially in the U.S. as a conservative market – car buyers still want things like XM satellite radio.”
- CEO USA, Premium OEMThe core insight is simple: owning the vehicle beyond the first sale generates up to 1.5x more profit per unit than the traditional one-time transaction model. Multi-cycle vehicle allocation (e.g., Vehicle-as-a-Service (VAAS)) allows OEMs to keep cars in their portfolio longer, extend their revenue opportunities across multiple owners, and continuously re-engage customers through recurring contracts.
By retaining assets in their portfolio, OEMs and Captives can expand their customer base while generating up to 1.5x more profit per vehicle
Source: AlixPartners / Berylls by AlixPartners
Each cycle—be it a subscription, a used car lease, or a second-life credit program—adds incremental margin from aftersales, finance, and services. While individual VAAS contracts may be less profitable than a new sale, the aggregated profit across three or more cycles surpasses traditional models significantly. In one case example, a single vehicle generated over €6,000 of cumulative profit across three lifecycle stages, compared to less than €4,200 in a one-off new car sale.
“Loyalty programs are the most powerful driver of incremental revenue and customer retention –ensuring clients stay within the brand ecosystem even after a change of vehicle ownership.”
- CSO, Volume OEMThe benefits extend beyond direct financial gain only. Retaining control of vehicles creates recurring customer touchpoints, lowering acquisition costs and strengthening brand loyalty. Research shows that keeping existing customers loyal is 5–10 times less costly than acquiring new ones. Multi-cycle models also create natural upsell opportunities: a driver who leases a used EV today may be primed for a new model subscription tomorrow.
The indirect benefits compound over time. Satisfied customers generate word-of-mouth recommendations, lower churn, and reduce the need for costly marketing campaigns. They also prove less price-sensitive, enabling more dynamic pricing with fewer discounts. For OEMs, this translates into higher returns on marketing spend, more efficient customer service, and stronger employee engagement.
Financial services sit at the heart of lifecycle control. Leasing, credit, insurance, and bundled service contracts not only generate stable profit streams but also tie customers into the OEM ecosystem. For BEVs, financing innovation is particularly critical:
Such offerings directly address some of the biggest barriers to BEV adoption — price, residual uncertainty, and maintenance anxiety—while keeping OEMs connected to vehicles across successive owners.
Aftersales remains the backbone of OEM profitability, often accounting for around half of industry profits. However, the transition to EVs threatens this foundation, as BEVs require fewer traditional service interventions. OEMs must respond by redefining aftersales: predictive maintenance, software upgrades, battery diagnostics, and connected services can replace declining mechanical revenue streams.
By embedding these services into financing contracts or subscription packages, OEMs can transform aftersales into a future-proof, digitally enabled profit pool.
The message is clear: the future of automotive profitability lies less in speculative new revenue pools and more in mastering the full lifecycle value of each vehicle. OEMs that retain ownership and customer connection across multiple usage cycles can protect margins, stabilize BEV adoption, and build resilience in an increasingly competitive market.
The winners will be those who treat vehicles not as one-off transactions but as recurring platforms for value creation—from first registration to reuse and recycling. By shifting to multi-cycle models, OEMs can unlock stronger profits, deeper customer loyalty, and a sustainable path to long-term growth.
Featured Insights
he automotive sustainability narrative currently seems to stand at a critical crossroad as progress on decarbonization and fleet emission reductions slows down.
In this discussion paper, we highlight the influencing factors that lead to the recent cooldown of sustainability efforts. While economic pressures increasingly impair financial headroom of industry players, we argue – though certainly an inconvenient truth – that a departure from sustainability actions would not only put an end to progress achieved so far, but also harm OEM and supplier sustained competitiveness.
1. The automotive industry demonstrates measurable progress in sustainability.
OEMs have significantly reduced their direct emissions (Scope 1: –18%, Scope 2: –58% since 2018) and lowered average EU fleet emissions by 8.3%. These achievements underscore that sustainability has become a core performance indicator across the industry.
2. Sustainability ambitions are losing momentum.
Despite notable progress, around 50% of OEMs have recently scaled back, postponed, or abandoned their electrification targets. This trend risks undermining achieved gains and delaying the realization of scale effects in the transformation process.
3. Four global forces are slowing down the transformation.
Heterogeneous global customer demand (especially China vs. Rest of World), divergent regulations, rising geopolitical tensions (tariffs, wars, supply bottlenecks), and the ascent of Chinese competitors are putting pressure on margins and complicating investment decisions. OEMs are thus challenged to advance sustainability in an environment of declining planning certainty.
4. An inconvenient truth: Sustainability remains a strategic imperative.
In the face of global headwinds, OEMs cannot afford to scale back their sustainability efforts. Instead, they must respond with regionally differentiated strategies and flexible investment approaches. Those who ease off now risk competitive disadvantages, reputational damage, and limited access to capital—particularly when competing with consolidated, scale-driven Chinese players.
5. Sustainability as a management tool and value driver.
Integrating environmental and ESG metrics into core processes, governance, and product development is becoming a prerequisite for investor confidence, resilience, and growth. Companies that embed sustainability as a fundamental element of their management systems will not only ensure compliance but also unlock long-term economic value.
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Featured Insights
treamlining the Operating Model for the Software-Defined Vehicle
WHY now is the time to act
The rise of software-defined vehicles (SDVs) is reshaping the economics of the automotive industry. Software has become the primary driver of differentiation and profit, while digital-native OEMs, particularly from China, set the benchmark with weekly OTA releases, vertically integrated organizations, and cost structures that are up to 40% lower than those of their legacy peers. An example of this can be seen in the quadrupling of the market share of Chinese OEMs in Europe since 2020. Without a fundamental redesign of their R&D operating model, incumbents risk not only falling behind but also becoming irrelevant.
WHAT it takes is a dual transformation of the operating model
Winning in the SDV era depends on two essential shifts: First, a strategic transformation that aligns the operating model with SDV-driven product strategy, and second, an operational transformation that delivers speed and efficiency by simplifying structures, accelerating workflows, and optimizing workforce setup. The SDV.OM (Operating Model) Framework, developed by Berylls by AlixPartners and the Institute of Technology Management at the University of St. Gallen, builds on insights from leading industry executives and provides practical guidance for assessing and transforming R&D operating models. Structured around six key dimensions and corresponding 18 action fields, it focuses on the KPIs that truly matter. This enables fact-based performance baselining and direct benchmarking against SDV front-runners.
HOW to turn strategy into measurable performance
The SDV.OM Framework provides a clear path to steer the dual transformation of R&D organizations. The process begins with preparation, involving the alignment of key decision-makers and the establishment of a validated fact base across the six operating model dimensions. It continues with analysis, benchmarking against SDV front-runners to expose the execution gaps that matter most. Finally, it drives transformation by closing these gaps with targeted measures, clear ownership, and continuous steering via the SDV.OM Framework. Applied with discipline, the playbook enables CTOs to turn strategy into measurable R&D performance.
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attery electric vehicle (BEV) adoption is growing, but the momentum is uneven. While digital interest in BEVs is high—often three times higher than for internal combustion vehicles—this enthusiasm does not yet translate into retail sales.
In most major European markets, it is fleet customers, not private buyers, who are driving adoption. In Germany and the UK, more than 70 percent of new BEV registrations already come from fleet channels. For OEMs, fleets are therefore not just a sales engine, but a critical gateway to private demand.
Despite rising visibility, private adoption of BEVs remains constrained by a set of recurring barriers. Purchase prices (MSRP) are still up to 30 percent higher than comparable ICE models. Residual values lag as much as 32 percent behind ICE equivalents, undermining consumer confidence in resale. Charging infrastructure continues to be insufficient or unreliable, particularly outside urban centers, fueling range anxiety. On top of this, customers often face limited retail guidance—dealers are frequently better trained (and/or incentivized) to sell ICE products than to reassure hesitant EV buyers.
These obstacles are not just perception issues; they have tangible financial impact. In China, for example, an intensifying price war has pushed average BEV prices down by 30 percent in just twelve months, leaving consumers wary of resale stability. BYD in China offers the model Seagull for less than 7,000 € (vs. 22,990 in EU). In Europe, cross-market comparisons show BEVs carry a visible MSRP premium, leading many private buyers to abandon them early in the consideration funnel—even if leasing rates are sometimes more favorable – up to +50% less compared to equivalent ICE models.
(See also BEV Study 2025)
¹ Basic entry price for the vehicle class without consideration of comparable equipment features ; Excluded VAT and additional fees;
² 0€ deposit/ 10k km p.a.; 36month leasing period
Source: AlixPartners / Berylls by AlixPartners analysis; Leasingmarkt.de; Leasing.uk, truecar.com
By contrast, fleet adoption tells a different and more encouraging story. In Germany, more than two-thirds of BEVs registered belong to corporate fleets. In the UK, the figure is closer to 85 percent. Chinese OEMs are leveraging aggressive fleet strategies to establish a foothold in Europe, with the top five Chinese BEVs in Germany achieving a B2B market share growth of over 113 percent CAGR within a year.
Fleet channels matter because they lower the adoption barrier for individuals. Every corporate BEV has both a driver—who experiences e-mobility risk-free, often with strong tax benefits—and a future private buyer when the vehicle enters the used market.
“Fleet sales are a key driver of BEV penetration, supported by extended test-drive programs (four weeks) that can convert up to 50% of customers.”
- CCO EU, Volume OEMOff-lease BEVs thus create a pipeline of more affordable vehicles, critical to reaching price-sensitive mass-market customers.
“Intelligent management of total cost of ownership, residual values, and the used car market is essential to overcoming BEV adoption barriers”
- CSO, Premium OEMUnlocking private BEV demand requires tackling three interconnected issues: pricing, residual values, and customer trust. OEMs must narrow the MSRP gap with ICE models and communicate the advantages of lower operating costs more effectively. Leasing strategies should directly address residual value concerns, for example by introducing “battery health guarantees” that protect resale prices. Innovative financing, such as subscriptions or EV-specific leasing bundles with charging services, can also make EV ownership more predictable and attractive.
At the same time, used BEV markets need targeted support. Frequent model updates and rapid technological cycles depress residuals, creating skepticism among second-hand buyers. Proactive remarketing, certified pre-owned EV programs, and partnerships with auto banks can stabilize this market segment and build confidence.
The path to mass adoption will not be automatic. OEMs must actively convert fleet momentum into private sales by addressing the structural barriers that hold back retail customers. This means ensuring the digital-to-retail funnel does not break down—turning high online interest into real-world registrations through stronger test drive programs and better-trained retail staff. It also means adapting strategies by market: in Europe, leveraging corporate fleets as a launchpad; in China, navigating price volatility while defending brand equity; and in the US, ensuring competitive leasing and federal incentive alignment.
Fleets have adopted BEVs much faster – can we use that to unlock mass BEV acceptance?
Fleets are the launchpad, but not the endgame.
To secure lasting BEV adoption, OEMs must move beyond relying on corporate customers and unlock private demand through pricing discipline, residual value management, and innovative leasing solutions. Done right, this dual strategy will ensure that today’s corporate drivers become tomorrow’s private EV buyers—scaling electrification far beyond fleets and into the mass market.
rtificial Intelligence has been a buzzword in the automotive industry for years. But while “smart factories” and predictive maintenance systems have attracted significant investment, the commercial side of the business being marketing and sales, has largely been overlooked.
Most AI budgets in the automotive industry still flow into operations and quality assurance, leaving a massive opportunity untapped where it provides still white spots: in driving customer engagement, sales conversion, and revenue growth while cutting costs in marketing & sales.
This imbalance is striking. Less than one-third of AI spend currently goes into customer-facing areas, even though the potential upside is immense. Our Analysis shows that AI could reduce cost per lead by approximately 30 percent—equivalent to roughly €100 per lead—and generate more than €6.2 billion in annual savings for the top twelve global incumbent OEMs. This is because, AI-driven sales engines can deliver 20 to 50 percent higher conversion rates, powered by smarter configurators, predictive pricing tools, and lead-handling bots. What started as an efficiency play has now become the industry’s next growth engine.
AI can reduce lead cost by 30% and thereby unlock €6.2B in global annual cost savings
The use cases are no longer theoretical. Generative AI is already transforming marketing by cutting content production costs by up to 60 percent while enabling hyper-localized, highly personalized campaigns at scale – across all channels and formats.
“Aftersales holds the greatest potential for AIdriven impact – particularly in call center operations, vehicle inspection, and predictive maintenance – combined with AI-driven marketing content generation.”
Chatbots and virtual assistants are proving their value in the mid-funnel, reducing agent handling costs by up to a third while keeping customers engaged around the clock – and in a “private” environment where customers can ask any question. AI-optimized media placement is reshaping how campaigns are run, ensuring every euro flows into the channels that deliver maximum return – also through high degree of personalized addressing enabled through “endless” content pieces. Together, these applications are not just trimming costs—they are reshaping the economics of customer acquisition.
Although the number of AI use cases reported by automotive players has grown twentyfold since 2020, most initiatives remain concentrated in operations. Only about a quarter of AI initiatives touch sales and marketing, despite its outsized potential for margin improvement. The reasons are familiar: fragmented customer data, concerns about time-to-value, scarce AI and digital talent, and brand or legal risks linked to scaling generative tools – in addition the dependency on current workflows where the agency holds the advantage on knowledge on this new technology. As a result, many OEMs remain stuck in pilot purgatory, unable to integrate AI fully into their sales & marketing activities.
“OEMs are still in the learning phase; lessons from current AI implementation pilots are not yet ready to be scaled”
- CEO DE, Volume OEMBreaking through this barrier requires alignment. AI strategies must be tailored to the sales model itself. Direct-to-consumer entrants like Tesla or Rivian can harness AI for immersive digital showrooms, personalized pricing, and configurators that reduce decision complexity. Established OEMs with franchise or hybrid models, by contrast, need to focus on lead efficiency, media optimization, and centralized inventory analytics—areas where AI complements, rather than disrupts, the dealer network. One-size-fits-all simply will not work.
“GenAI is being applied across the business – from enabling faster website journeys, to optimizing social media, to increasing ordering efficiency”.
- CEO USA, Premium OEMThe promise, however, is too large to ignore. By embedding AI into marketing and sales, OEMs can do more than cut costs—they can accelerate electric vehicle adoption by giving customers better information, reassurance, and service throughout the entire journey. From awareness to retention, AI can improve satisfaction, raise Net Promoter Scores, and boost repurchase rates.
The conclusion is clear: AI must graduate from a back-office efficiency lever to a commercial growth engine. For automotive players navigating a fiercely competitive, electrified market, the winners will be those who harness AI not just to save money, but to sell more cars.
he automotive industry is undergoing a once-in-a-century transformation. Electrification, digitalization, and the rise of new competitors dominate the headlines of the industry, but one of the most disruptive shifts today is happening in sales and distribution. The way cars are sold is being redefined and the winning formula will be hybrid.
For years, direct-to-consumer (DTC) and agency models were positioned as the inevitable future of automotive retail. Inspired by Tesla’s trailblazing direct sales model, OEMs envisioned tighter pricing control, stronger customer relationships, and healthier margins. Billions were poured into contracts, IT platforms, and pilot programs.
Yet, as the dust settles, many of these initiatives have stalled or reversed. Recent announcements from OEMs such as Volkswagen and Stellantis underscore a broader reality: the pure agency or DTC model is not scaling as expected. Many launches have been postponed (e.g., BMW), halted, canceled (e.g. Skoda, VW), or reframed as “long-term targets.” In short, what was once seen as an unstoppable wave has proven to be a costly and uncertain experiment.
“Building a fully owned direct-to-consumer models have proven too costly and complex for most OEMs. The focus should therefore be on the most suitable functions and on enabling retailer partners to succeed”
The future of automotive sales models is not uniform across the globe. Regulatory frameworks, customer preferences, and market maturity drive very different strategies — yet a common trend is clear: direct-to-consumer and agency sales models will account for only up to 10% of global new car sales. The vast majority will still flow through dealers.
Development of Direct Sales/ Agency Model share for main regions (% of total new car sales)
Dealers continue to offer unique advantages that OEMs cannot replicate at scale: local presence, customer service, and the ability to absorb working capital and operating costs. Dealers also remain critical for customer acquisition, trade-ins, and aftersales relationships.
“Retail partners remain a central pillar of customer engagement, making hybrid models that combine retailer strengths with selective direct-to-consumer elements the most viable path forward.”
However, this does not mean a return to “business as usual.” OEMs need to rethink the dealer relationship. The opportunity lies in Dealer 4.0—a hybrid approach that integrates the Best-of-Both worlds: the efficiency and data-driven insights of agency models, combined with the entrepreneurial strength and reach of traditional franchise networks.
“Direct-to-consumer and agency models bring significant benefits but require substantial investment in capital and skills; hybrid models are likely to dominate in the future.”
Instead of abandoning innovation, leading OEMs are focusing on hybridized models that mitigate the weaknesses of both systems:
1. Mitigated downsides of dealer entrepreneurship
2. Optimized costs
3. Retained control
This hybridized “Best-of-Both-Worlds” approach enables superior sales performance at lower fixed costs.
The lesson is clear: pure agency or DTC will remain niche. The future is hybrid—OEMs combining the structural advantages of new sales models with the operational resilience of dealer networks. Success will hinge on redefined partnerships, collaborative IT systems, and a pragmatic balancing of cost and control.
Car dealers are not being replaced—they are being reinvented. The industry’s next chapter is not about choosing between DTC, agency, or franchise. It’s about hybridization, where the strengths of each model converge into a more efficient, scalable, and customer-centric Dealer 4.0 system.
he 3 Biggest Supply Chain Risks in Automotive
Raw Materials • Rare Earths • Chips
They’ve all disrupted production before. None are secured for the future. The risk of recurrence? Higher than ever.
From lithium for batteries to palladium for catalysts – raw materials define the limits of future mobility.
“Rare earths remain the automotive Achilles’ heel – Europe thinks it has a pathway to reduce dependency, but China’s choke points are structural, not cyclical”
What the pipeline really delivers in EU – capacity:
How the headline(s) really impact the price:
Racing Toward a Chip Crunch: SDVs and AI Set the Stage for
2027 Shortage
Shortage by 2027
Supply Chain Risks – Automotive Left Behind: AI Chips Win the Capacity Race
pportunities in Defense: Key Questions for non-defense players
1. What are the overall developments in the defence sector?
2. Where are direct overlaps for automotive products and how large is the german market for those products?
3. Are compentencies and resources from e.g. automotive also relevant for the growing defense sector?
4. Is the market attractive for us and do we have the required products, resources, capabilities?
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