Business as usual is not an option anymore for our present economy. Looking at the importance of the automotive sector for both Europe and Slovakia a transition to new collaborative models is especially urgent. Circular Economy is an inspiring and above all promising concept. New business models like circular supply chain, product life extension, sharing platform, product as a service and recovery and recycling offer perspective and front runners are walking the talk and offer inspiration.
In the automotive sector, shifting consumer demands call for new mobility services, while tightening regulation will require collaborative innovation along the value chain. In the automotive supply chain, we can already observe several trends: in the electronics sector, circular opportunities are expected to arise from improved end-of-use strategies, enabled by circular design. In the parts and components sector, maintenance, repair and remanufacturing strategies will play a major role in the circular economy and overall, product-as-a-service has the potential to take root. There will be a need to redefine roles in the circular value chain and manufacturers and suppliers might need to rethink ownership. In the light of the tighter emissions regulations automakers must invest in electrification. However, the combustion engine will still be around for a while. Creating new material loops is essential for a circular economy and this will require rethinking the design, production, usage and waste phase.
Present “legacy” or linear support mechanisms are not adequate. Financial Institutions want to facilitate this transition and are rethinking their role in the wider value chain, becoming more a partner closer to their client’s needs and are starting to adjust their risk models and support offerings. Governments cannot drive this transition alone and need to reach out to industry to scale up, involve knowledge communities for innovation and consumers for support. Regulation will need to be tuned in every part of value-chain from design to production, consumption and waste phase.
It is a highly complex and dynamic transition that will take time while change is urgent. The central keyword is collaboration.