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February 2007

Auto manufacturers need to go green

According to commentary delivered by Deloitte Consulting LLP at the 2007 North American International Auto Show (NAIAS), companies are falling short in recognizing the impact of a critical business component for survival: "going green." The transition, Deloitte Consulting says, is a vital business component for today's automotive manufacturers in particular, to not only survive, but to thrive.

According to industry experts, automotive manufacturers that generate increased value through reduced impact on the environment, or those who "go green," are the companies that will draw the most customers, the best talent, and long term health -- even as the dynamics of global conditions continue to change at a rapid pace.

"Companies that build a capability for sustainable transformation will build and lock in competitive advantages as the marketplace, regulation and customer demand move in this direction," said Christopher Park, principal, Deloitte Consulting LLP. "Companies that do not invest now run the risk of being compromised or even eliminated if the effect of sustainability on brand equity drives real and rapid changes in market valuations."

To drive long term and repetitive shareholder value, the definition and application of green principles must be expanded to encompass the entire activity base of the enterprise. According to Deloitte Consulting, "green" can be defined as a set of core principles where waste is reduced, eliminated or reused; net consumption of resources (capital, human or natural) for a specific product or service outcome is reduced; consumed resource is partially or completely replaced; the ratios of natural to man-made and organic to synthetic are increased; and the net global impact footprint is reduced.

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