Navigating Challenges in Asset-Intensive Industries: Insights for 2025
In 2024, asset-intensive industries such as manufacturing and transportation were beset by a confluence of challenges, including rising energy prices, restricted access to essential raw materials, and higher borrowing costs for capital projects. These pressures forced leaders within the sector to intensify their focus on cost management and operational efficiency. Deploying digital solutions and strategic frameworks to adapt to a rapidly changing economy became paramount. In the mobility sector, energy transition efforts towards electrification encountered significant hurdles—falling subsidies, steep upfront costs, inadequate infrastructure, and impending tariffs prompted potential buyers to reconsider their investments, thereby exacerbating the industry’s struggles.
Looking ahead to 2025, the global macroeconomic landscape is anticipated to remain challenging, offering little in the way of immediate improvement. Nonetheless, industry stakeholders in both manufacturing and transportation sectors may find opportunities to leverage technology as a means of adjusting to these ongoing difficulties. The emphasis on digital and technological adaptations may pave the way for operational improvements, contributing to resilience amid the persisting unpredictability in market conditions. In particular, the electrification of vehicles is expected to gain traction within specific market segments, laying groundwork for sustainable growth despite economic headwinds.
In the context of last-mile delivery services, projections indicate that more than 25% of major fleets in Europe will transition to electric by next year. Despite a notable decline in electric vehicle sales during 2024—especially in Germany and parts of Europe—there are bright spots in electrification. Leading companies such as DPD and British Gas are advancing their electrification goals, with DPD already achieving a substantial 33% electrification across its UK fleet and targeting 90% in metropolitan areas like London. Furthermore, companies like Amazon are also investing significantly in electric vans to modernize their delivery operations in Germany and the U.S., showcasing how operational costs and sustainability goals can align as sectors evolve.
On the robotics front, it is projected that less than 5% of the robots utilized in factories and warehouses will possess walking capabilities. While advancements in robotics, such as the four-legged robots from ANYbotics and Boston Dynamics, garner public intrigue, their practical applications in industry reveal more limitations than opportunities. Industry investments in walking robots are largely driven by their novelty rather than their utility for traditional factory tasks predominantly classified as dull, dirty, and dangerous. By shifting the focus from robotic aesthetics to functional capabilities, businesses can enhance productivity and efficiency through technology with proven effectiveness.
Amidst these technological dynamics, significant structural changes are anticipated, particularly within the automotive sector. Major car manufacturers are poised to make sweeping cuts to their digital teams as they contend with the implications of electrification, emerging competitors, and the paradigm of the software-defined vehicle. While companies like General Motors invest heavily in integrating digital and physical engineering, they face overwhelming challenges, prompting widespread layoffs across their software divisions. This shift underscores the necessity for established player to adapt to an evolving landscape, where controlling the digital experience of vehicles may become less tenable.
As these sectors grapple with the dual pressures of technological transformation and economic uncertainty, the focus on embracing innovation and re-evaluating operational models will be critical for survival and growth. Leaders are encouraged to download comprehensive guides and resources that outline strategic forecasts and insights to help navigate the complexities of 2025. By leveraging the right tools and frameworks, manufacturing and mobility organizations can position themselves to not only withstand the pressures of the present but also thrive in the anticipated disruptions of the future.
