The Capital Goods and Automotives Sector: Paving the Way to Treasury Transformation 2.0

Major capital goods and automotives (CGA) corporates are often early adopters of new treasury techniques and technology largely due to their substantial size, as the corresponding extent of potential cost savings and efficiency gains are attractive. As Jared Smith, Global Sector Head of Capital Goods and Automotives at HSBC Global Liquidity and Cash Management describes, because their needs are often more pronounced than treasuries in other sectors with less diverse geography and product need, CGA corporates are paving the way forward in treasury transformation.

The largest members of the CGA sector were among the first corporates globally to focus on treasury centralisation. As global, highly-diversified industrial companies, they could see the substantial potential benefits of migrating to SWIFT and common message standards, while also streamlining their banking relationships. The overhead of supporting multiple proprietary message types could be removed, central treasury’s visibility of cash globally could be enhanced and banking costs could be minimised by closing surplus accounts. In addition, their ERP systems were able to run more efficiently in terms of both processing and providing valuable management information. Essentially, these CGA corporates completed Treasury Transformation 1.0 10-15 years ago and over the intervening period have already evolved to Treasury Transformation 2.0 or beyond.

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