Felix Kuhnert, partner and head of the Automotive Industry division at PwC in Germany and Europe, explains in this interview how PwC handles the issues and challenges of the automotive sector and develops optimal solutions for its clients.
Head of the
division at PwC
Felix Kuhnert: The basic requirement when giving our clients the best possible advice, and when submitting a sound audit opinion, is that we are fully informed about the fundamentals of the industry and the business model of the organisation. In our Assurance, Tax and Advisory Service Lines, we develop and provide many services which are primarily independent of the Industry. The Industry's job is that of identifying the requirements of the sector and feeding this information back into the Service Lines. In order to do justice to sector-specific issues and subject areas, we have focused on eight Industries. In these areas, we are strengthening our understanding of business activities, operational processes and the risk landscape, and increasing our experience and competence.
Our clients in the Automotive Industry mainly consist of automobile manufacturers and suppliers who are faced with complex challenges in a completely globalized industry. Worldwide, they are confronted with very specific questions regarding market characteristics, demand behaviour and regulatory outline conditions, all of which can impact their strategic and operative alignment for the fundamentally different markets. Naturally, our clients also include companies with a regional focus in the vehicle trade and aftermarket.
Kuhnert: The automotive industry currently finds itself in a period of structural and technological change as never seen before. On the one hand, large threshold countries – led by China – are taking over in both production and demand the leading role in this globalized industry and, consequently, confront established manufacturers and suppliers with completely new challenges. On the other hand, in the countries of the "old world" there are signs of a major change in consumer mobility behaviour patterns, placing the emotional role of the automobile more and more in question in those countries. This development is weighing heavily on the minds of German manufacturers in particular as suppliers of premium vehicles.
On a global level, the industry is also faced with the enormous challenge of current declining levels of availability of economically transportable fuel. This development will have noticeable consequences in the near future as a result of rapidly rising motorization in threshold countries. Many consumers and, above all, political decision-makers worldwide see a long-term solution to this problem in the introduction of the electric vehicle. The volume of investments required in this respect, however, are enormous and many problems on the road to an electro-mobile future still remain unsolved.
Kuhnert: We offer organisations services that are customised to the needs of the sector. We have some 1,500 specialised auditors and consultants working worldwide who have acquired their expertise at leading organisations in the automotive industry and offer comprehensive experience in strategic, financial, accounting, tax and legal issues. Many members of our staff come directly from inside the industry, and some even have a technical background. These colleagues support us in such areas as market entry strategies, M&A, commercial due diligence, strategic realignment and process optimization. In addition, Autofacts also follows trends very precisely in the industry such as the mobility behaviour patterns of consumers worldwide, the understanding of "Premium" and the further development of electro-mobility. In this way, we are able to incorporate into projects for our clients not only our methodical-analytical expertise but also well-founded know-how of the automobile industry and its drivers and changes.
A strong network, with the know-how required in the markets relevant to our German clients abroad, is essential for the provision of an efficient service to our clients, who operate all over the world. The international PwC network has centres with German-speaking staff at all key locations, known as the "German Desks", who are conversant with the local statutory accounting requirements. The "German Desks" offer a comprehensive network of skilled advisers for our clients' international and country-specific questions whilst bridging cultural differences. The PwC experts collaborate closely with our team in Germany, developing optimal solutions for clients' organisations on the ground.
Kuhnert: PwC is constantly analysing trends and future developments in the automotive industry to develop timely and optimal solutions for the challenges our clients face. In doing so, we draw upon the market observations of Autofacts whose strategy-oriented, international analysts regularly publish production and capacity forecasts as well as strategic market analyses and ratings. From this information we generate specialist know-how, products and services for the Automotive Industry.
The automotive team in Germany extracts "tomorrow's issues" from the industry trends, and, together with experts from our Service Lines, develops solutions for our clients. This enables us to identify challenges and risks for our clients in advance, and to offer them approaches to solutions. Whilst doing this, it is important for us to listen carefully to our clients so that the solutions we offer them match their specific needs and expectations.