The successful players in this industry share a common trait: they manage to offer the right products to customers. Yet, providing a product that fulfills the customer's true needs - a capability that should be at the core of every OEM - is easier said than done and difficult to sustain. While some niche products hit the bulls-eye, all too often OEMs have invested in vehicles and features that miss the mark, sometimes by a wide margin. Understanding what target customers want, designing a product that clearly fulfills their needs and delivering the brand promise have become make-or-break capabilities for all OEMs.

That challenge is compounded by the pressure on OEMs to continuously improve their cost position by restructuring operations. With broad and expanding product lines, OEMs need to manage the cost of complexity carefully as they build their strategies around vehicle platforms and modular sub-assemblies. Alliances and mergers are likely to continue shaping the industry as key players look for benefits from increased scale. But the added complexity that arises from combining product lines and aligning different company cultures can undercut the benefits of a big merger or acquisition that lacks a strong investment thesis and the right approach to integration.

As product quality improves and vehicle features steadily converge, it's becoming harder for automakers to appeal to customers by offering unique and distinctive products. Increasingly, the big opportunities for differentiation are downstream, along various customer touch-points in sales and services. Because most OEMs operate with independent dealer and service networks, delivering a strong, consistent brand experience at these points of contact is challenging - but the benefits are equally large. Using Bain's unique Net Promoter ® Score (NPS) disciplines for building customer loyalty, we have identified significant opportunities for OEMs to grow by improving the customer experience.

Learn how to measure NPS on The Ultimate Question website

® NET PROMOTER is a registered trademark of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld

Bain's Automotive experience

We work with OEMs, suppliers, distributors and dealers on strategic, organizational and operational issues along the entire automotive value chain. We help our clients to build and adjust their growth and brand strategies to cope with emerging challenges. Working together with client teams, we help to develop practical programs for cost reduction, complexity management, product development and profit hunts. In all our projects we have one goal: Finding solutions that can be implemented and will generate significant and tangible value for our client.

Since 2000 we have successfully conducted hundreds of projects at OEMs, suppliers and dealers. Through our Private Equity Group we have also participated in many due-diligence and M&A activities in the automotive sector.

To find out more about our work in this industry, please contact Bain's Automotive practice.