Managing Product Innovation in the Automotive Industry in light of the environmental challenge

University dissertation from Luleå tekniska universitet

Abstract: A company’s ability to introduce new products is a key success factor for sustaining a competitive advantage. Increasing environmental concerns are an even stronger incentive to innovate. Environmental regulations will exert immense pressure on manufacturing industries, which will increase in the future, enabling a more sustainable world for coming generations. Facing the automotive industry, an aggravating circumstance is, however, that the industry is deeply affected by the paradigm grounded in mass production, a dominant design and incremental development. A common view in the innovation literature is that large, established firms usually experience difficulty fostering radical innovations. Taking on the environmental challenge, it is argued that companies lack the methods, tools and processes to scan markets and to find opportunities beyond their existing businesses. Further challenges fostering radical innovations are the conflicting demands to explore new opportunities in parallel with daily business. The aim of this thesis is to explore the prerequisites embracing innovations in terms of what hinders and enables the development and implementation of new technologies in future products. The research question is answered through qualitative studies at Saab Automobile, Volvo Cars and the lightweight project SåNätt. I also draw upon my experience working in the automotive industry for many years. The empirical studies revealed different approaches to develop radical innovations. While one of the companies focused on radical development of new concepts aiming to build a supplier structure for collaboration, the other company’s focus was on incremental development of technical solutions to be implemented in a shorter time horizon. However both companies were stuck in the paradigm where the first focused on more explorative projects and through significant interest in technology and a more informal way of working, they managed to bypass several parts in the paradigm. The other company was managing the projects through a formal process governed by strategic plans and a strong implementation focus and was more deeply committed to its infrastructure for body manufacturing thus hindering more radical changes. The thesis shows that some inertias in the paradigm can indeed be challenged, but it also shows that in order to succeed in an environmentally driven transition, the paradigm dominating the automotive industry has to be questioned.

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