CIMdata PLM Industry Summary Online Archive
30 June 2004
Company News
PTC Global Study on Automotive Manufacturing Industry Links Superior Product Development to Positive Financial Performance
PTC announced the results of a new global benchmark study of the automotive industry. The study revealed that deploying a superior product development strategy has a positive impact on financial performance. Conducted by PTC and the Aachen University of Technology in Germany the study is based on interviews with senior executives (vice president and directors) across North America, Europe and Asia in the automotive industry.
The results indicate that automotive companies can achieve a significant competitive advantage through superior product development capabilities and execution. And while most companies share similar business objectives, the difference between leaders and laggards is ultimately in their product development capabilities-with the top performers owning advanced product development capabilities that enable them to translate their strategies into positive financial performance.
The study highlights the best practices of the industry leaders and includes the following conclusions:
The Big Divide-The financial value of competitive advantage is clear within the automotive industry, as better performing companies enjoy significantly higher profit margins and revenue growth rates over lesser-performing counterparts. In addition, the profitability gap between the financially successful automotive companies and less successful ones is even larger than expected-and it continues to widen.
Financial Success Linked with New Product Revenue-Looking at different measures of R&D performance, financially successful companies gain a clear competitive advantage by their ability to drive revenue from new products.
More Bang for More R&D Buck-No matter what stage of a company's lifecycle, the leaders tend to invest more in R&D per employee. Also, leaders in revenue growth spend 20 percent more in R&D than their peers, yet realize almost seven times more revenue from new products-a trend that goes hand in hand with significantly higher R&D spending per employee.
"The study results suggest a strong connection between product development investment and corporate success-both competitive and financial," said Dhiren Verma, director, Product and Market Strategy at PTC. "And while both the leaders and laggards in the automotive industry appear to be pursuing the same product development strategies, it's ultimately their ability to execute on those strategies that determines their success."
The study also offers some general industry observations within the automotive industry. With forecasts of higher revenue growth in the future, there is an overall optimism within the industry, as companies are expecting to see commensurate growth in R&D budgets. In addition, the automotive industry is also seeing increasing complexity in the value chain, with a dramatic increase in outsourcing of product development and manufacturing, and significant growth in the number of sites companies must manage and coordinate in their product development process.
To learn more and to become a participant in the ongoing study, which is measuring how an automotive company's product development practices and capabilities measure comparatively to the top performers in the industry, visit http://www.ptc.com/solutions/industry/automotive/index.htm
RWTH-The Aachen University of Technology in Germany, is one of the world's largest and most distinguished engineering universities. Founded in 1870, RWTH today enrolls more than 30,000 students.
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