Strategies to Cope with Regulatory Uncertainty in the Auto Industry

Automotive assemblers and suppliers have employed a number of different strategies to deal with external uncertainty. These strategies have evolved relatively rapidly of late in part because of changes in the locus of innovation from OEMs to suppliers, changing market conditions, and the future regulations of greenhouse gases. This presents a unique challenge for the industry. Some auto firms have been more effective in dealing with market and regulatory uncertainty due to technology resource integration across platforms and integration between functions on the value added chain from suppliers to retailers.