The document discusses how automotive companies can embrace circular economy principles to remain competitive. It notes that car sharing has improved vehicle usage rates and resource efficiency. If automotive companies adopt circular models across their value chains, from design to reuse, they could see a 14% cost reduction and $400-600 billion in additional revenue by 2030. The document advocates that automotive companies collaborate across industries, develop capabilities for continuous customer engagement and asset management, and position themselves strategically in the circular value chain.

1. Automotive’s
latest model
Redefining competitiveness
through the circular economy

2. 2Copyright © 2016 Accenture All rights reserved.
Now is the time for car manufacturers to
harness the power of the circular economy
At any given moment, $7 trillion
worth of passenger cars sit
unused around the world
Car and ride sharing have
transformed this waste into
wealth with 3 to 5x higher
usage rates & improved
resource/asset efficiency
$

3. 3Copyright © 2016 Accenture All rights reserved.
But car sharing is just the tip of
the iceberg…
Doing the circular
economy math
Vehicle Design,
Manufacturing/Distribution
Product as a Service
Product Life Extension
+
14% potential cost
base reduction
+
=
$400 - $600 billion
by 2030
potential revenue for
automotive companies
from selected circular
economy business models
=

4. 4Copyright © 2016 Accenture All rights reserved.
OEMs need to embrace circular
principles across the value chain
As circular business
models gain more traction
New passenger vehicle
sales will be threatened
Automotive players—especially
OEMs—need to widen the
number of plays they make
within the circular economy
from design to material reuse

5. 5Copyright © 2016 Accenture All rights reserved.
The circular economy value
chain for automotive companies

6. 6Copyright © 2016 Accenture All rights reserved.
The circular customer connection
Transforming operations to
harness circular business
models means gaining a direct
connection to the customer.
More profitable revenue
streams - ongoing service
over one-off sales
The result?

7. 7Copyright © 2016 Accenture All rights reserved.
Gaining the circular advantage
Map out a circular economy strategy -
and determine where to position the
business in the value chain.
How can circular value
be maximized?
1
Where can the company
best utilize it’s capabilities to
outcompete others?

8. 8Copyright © 2016 Accenture All rights reserved.
Gaining the circular advantage
Create the right ecosystem, allying
with leaders from other industries.
Jaguar Land Rover + aluminum recycling giant Novelis1
• Vehicles designed to utilize aluminum more effectively
• Manufacturing processes minimize waste
• Built-in recycling processes for products at end-of-life
Ford + global food manufacturer Kraft Heinz2
Collaboration to develop new component parts based
on food waste—tomato skins
2

9. 9Copyright © 2016 Accenture All rights reserved.
Gaining the circular advantage
Develop the right capabilities3
Embrace circular
Continuous customer
engagement can mean
major organizational and
operational changes
Enabled after-
sale service
Proactively manage
a products’ lifecycle –
keep track of assets,
optimize performance/
return, and measure
the product’s impact
Establish trust
Build relationships with
customers to maximize a
product’s utility across its
lifecycle, and encouraging
responsible return or
disposal at the end of a
product’s life

10. 10Copyright © 2016 Accenture All rights reserved.
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Join the conversation:
@AccentureStrat
Download the full report:
www.accenture.com/circularoem
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Sources
1 Jaguar Land Rover + aluminum recycling giant Novelis
http://www.sustainablebrands.com/news_and_views/chemistry_materials/sustainable_brands/novelis_recycled_aluminum_builds_jaguars_light
2 Ford + global food manufacturer Kraft Heinz
https://media.ford.com/content/fordmedia/fna/us/en/news/2014/06/10/ford-and-heinz-collaborate-on-sustainable-materials-for-vehicles.html
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