Tesla is the most “future-ready” automaker, while Chinese rival BYD has made the most progress in improving its resilience, according to an index compiled by a leading business school.
Elon Musk’s electric vehicle (EV) company ranked first in preparedness for future crises for the fourth straight year, while Shenzhen-based BYD climbed nine spots to fifth place , according to the ranking released by the Switzerland-based International Institute for Management Development (IMD) on Wednesday.
BYD’s local EV rivals XPeng, Li Auto and Nio placed 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 for future growth, company diversity, employee diversity, research and development, early results of innovation efforts, as well as cash and debt.
Howard Yu, the author of the index, said Chinese companies should look beyond the local market to sustain growth in the coming years.
“Zero COVID lockdown in China presents a short-term challenge,” Yu told Al Jazeera. “In the long term, Chinese companies – which are ready for the future – must seek international growth. If they earn a lot of foreign exchange, they are in a more favorable position.
“BYD is a great example of this, as 40% of its revenue comes from the international market; and market risk diversification is an important part of a successful strategy,” Yu said.
Yu said Asian companies continue to lag behind their Western counterparts in terms of diversity, in particular.
“The ranking sees the diversity of gender, nationality and mindset of leaders playing an increasingly influential role in business success – outperforming their competitors and being more resilient,” it said. he declares. “The trend sees the limited ability of an overly homogenous company to reinvent itself when too many employees come from the same background, whether in terms of CEO mindset or gender, and the critical mass is the tipping point for success.
Japan’s Toyota ranked second among the most future-ready automakers, followed by Germany’s Volkswagen and South Korea’s Hyundai.
BMW, Ford, Stellantis, Daimler and Geely Automobile complete the top 10. Renault, Suzuki and US electric vehicle maker Rivian made up the bottom three.
In IMD’s financial services ranking, Mastercard was ranked as the most forward-looking company, followed by Visa, JPMorgan Chase & Company, Paypal and DBS Bank of Singapore.
China’s Ping An Insurance, the only other Asia-based company on the list, ranked 12th, down five places from a year earlier.
American Express ranked last, followed by American International Group and Credit Suisse.
Yu said Asian financial players have significant room for growth.
“Finance requires deep customization in each region,” he said. “A good example is how DBS continues to rank among global banks, despite their relatively lower volume compared to their Western counterparts.
“The key is to leverage open innovation…and partner with other fintech disruptors. This is how leading financial companies stay nimble and efficient as they scale.