Global carmakers found to make slow progress toward digital redo

Dieter Zetsche stands next to a Mercedes-Benz EQC 400 4matic electric SUV in Stuttgart . (Bloomberg pic)

FRANKFURT: Auto companies are finding that it’s easier to adopt the trappings of the digital economy than to push through the changes necessary to become full-blown members.

While some executives have swapped suits and ties for trainers, and carmakers have established glitzy urban software outposts to attract new talent, the accompanying cultural shift is moving at a painfully slow pace, according to a new study by KPMG and recruiting consultant Egon Zehnder International being released at the Shanghai auto show.

The industry “seems to be clinging to its old ways,” according to the researchers, who surveyed more than 500 global industry executives. “Leaders recognise the unprecedented challenge now facing them, but have yet to establish the digital‐ready culture needed to meet it.”

The messaging is on-target. Outgoing Daimler Chief Executive Officer Dieter Zetsche now presents new models clad in jeans and track shoes, while Volkswagen headquartered its Moia future-tech division in Berlin, a one-hour train ride from the German carmaker’s mothership in Wolfsburg.

Factories from Detroit to Turin are being re-fitted for the dozens of electric models planned over the next several years.

But in the crucial area of culture, not much has changed to get companies digital-ready, more than half the respondents said.

While almost everyone agreed that the way the workplace operates must be redefined to tackle the transforming market, just one-third supported concepts such as flatter management structures. Even fewer would welcome a greater tolerance toward making mistakes.

“Executives are still thinking about digital transformation in terms of process change rather than a shift in mindset,” KPMG and Egon Zehnder said.