Tesla is the most “future-ready” carmaker, while its Chinese competitor BYD has made the most progress in enhancing its resilience, according to an index compiled by a top business school.
Elon Musk’s electric vehicle (EV) company ranked first for readiness to navigate the future crises for a fourth consecutive year, while Shenzhen-based BYD climbed nine places to fifth spot, according to the rankings released by the Swiss-based International Institute for Management Development (IMD) on Wednesday.
BYD’s local EV rivals XPeng, Li Auto and Nio ranked 12, 14, and 18, respectively.
The index, which has been compiled annually since 2010, bases its results on a combination of financial fundamentals, investors’ expectations of future growth, business diversity, employee diversity, research and development, early results of innovation efforts, and cash and debt.
Howard Yu, the author of the index, said Chinese firms would have to look beyond the local market to maintain their growth in the years ahead.
“Zero COVID lockdowns in China presents a near-term challenge,” Yu told Al Jazeera. “In the long run, Chinese companies – that are future ready – must seek international growth. If they are earning foreign exchange substantially, they are in a more favorable position.”
“BYD is a great example, as 40 percent of its revenue comes from the international market; and diversification of market risk is an important element of a successful strategy,” Yu said.
Yu said that Asian firms continued to lag their Western counterparts in diversity, in particular.
“The ranking sees diversity in gender, nationality, and the mindset of executives playing an engaging role in corporate success – outperforming their competitors and being more resilient,” he said. “The trend sees the limited capacity of an overly homogenous company to reinvent when too many employees come from the same background, whether in terms of CEO mindset or gender, and critical mass is the tipping point to success.
Japan’s Toyota ranked as the second most future-ready carmaker, followed by Germany’s Volkswagen and South Korea’s Hyundai.
BMW, Ford, Stellantis, Daimler and Geely Automobile rounded out the top 10. Renault, Suzuki and US EV maker Rivian made up the bottom three.
In IMD‘s rankings of financial services, Mastercard was rated the most future-ready firm, followed by Visa, JPMorgan Chase & Company, Paypal and Singapore’s DBS Bank.
China’s Ping An Insurance, the only other Asia-headquartered firm on the list, ranked 12, down five places from the previous year.
American Express ranked last, followed by American International Group and Credit Suisse.
Yu said Asian players in finance had significant room for growth.
“Finance requires deep customization in each region,” he said. “A great example is how DBS continues to rank highly among global banks, despite their relatively smaller volume compared to their Western counterparts.
“The key is to leverage open innovation… and to partner with other fintech disruptors. This is how top-ranking financial companies stay nimble and efficient, as they scale.”