The automotive industry in the whole world is one of the main pillars of the economy. With strong backward-forward linkages, it is a key and confined driver of growth. Liberalization and conscious policy interventions over the past few years created a vibrant, competitive market, and brought several new players. However, resulting in capacity expansion in the automobile industry and the generation of huge employment. The whole world is now an automotive hub.
Areas causing distress
Some areas which cause distress in the automotive sector are a slowdown in economic growth, high-interest rates, and fuel prices. Others are as follows:
- High inflation negative market sentiments
- Increase in commodity prices
- High customs duty on metals, Steel, and Aluminium Alloy.
- High rate of service taxes and excise duty
- High and varied rates of road taxes in small cities, metropolitan cities, states, countries, and low growth of export markets, etc
- Immediate steps have to be taken so that the Global Auto Industry becomes the engine of growth of the World’s manufacturing sector.
Transforming the world
Economies are dramatically changing, also triggered by development in emerging markets, up in new technologies around ownership and for products. Digitization, increasing automation, and pioneer business models revolutionized other industries as well, and automotive will be no exception. These forces are giving rise to four disruptive technology-driven trends in the automotive sector:
- Diverse mobility,
- Autonomous driving,
- Electrification, and
- 5G- Connectivity.
Most industries will reinforce and help in accelerating one another and the automotive industry is ripe for disruption. So, game-changing disruption is on the horizon, there is no clue how the industry will look after 10 to 15 years.
Future preferences
“2030 automotive revolution” has aim at providing scenarios concerning what kind of changes are coming, and what people want. And how the automotive industry will affect traditional manufacturers, potential new players, regulators, consumers, markets, and the automotive value chain.
- This study aims to make the sudden and imminent changes more tangible. Moreover, based on our current understanding, they are not deterministic in nature. But should help industry players better which can prepare themselves for uncertainty by discussing potential future states.
- The automotive revenue pool will significantly increase and will diversify towards mobility services and data-driven services.
- Connectivity, and autonomous technology, will increase to allow the car to become a platform for drivers and also for passengers. They can use their time in transit to consume novel media.
- The increasing innovation, especially in software-based systems, will require cars to be upgradable. However, shared mobility solutions having shorter life cycles will become of more common use. And consumers will be constantly aware of technological advancements, which further increases demand upgradability in privately used cars as well.
- Analysis suggests that dense areas with a huge, established vehicle base are fertile ground for these new mobility services.
Outcomes
- New mobility services may result in a decrease in private-vehicle sales. But this decline will increase sales in shared vehicles that replace more often due to higher utility, wear, and tear.
- Consumer behavior is changing with respect to mobility, leading to up to one out of ten cars. Hence, they will sell in 2030. Consumers’ new habit of using manmade solutions leads to new segments of special vehicles designed for every specific need. For example, the market for a car specifically built for e-hailing services. i.e. cars designed for high utility, robustness, plus additional mileage, and passenger comfort also would already be billions of units today. And this is only the beginning.
- As a result of this shift, one out of ten new cars in 2030 may likely be shared vehicles. Only which could reduce sales of private-use vehicles. Moreover, this means that more than 30 percent of miles driven in new cars sold could be from shared mobility. As the technological-regulatory issue is resolved, up to 15 percent of new cars sold in 2030 could be fully autonomous.
- Electrified vehicles are becoming more competitive; however, the speed of their adoption can vary strongly at the local level.
- Mobility providers (Uber), tech giants (such as Apple, and Google), and specialty OEMs. i.e. (Tesla) all of them are increasing the complexity of the competitive landscape. Traditionally, automotive industries were under continuous pressure to reduce costs, improve fuel efficiency, and reduce emissions.
Our Approach
TriColor Initiatives prepare for uncertainty always. We believe in Success. In upcoming years, automotive industries will shift to a continuous process of anticipating new trends and believing in exploring alternatives. Moreover, this will require a sophisticated degree of scenario planning and agility to identify and scale new attractive business models. We are transforming from competition among peers towards new competitive interactions, but also partnerships, and open, scalable ecosystems.
