What Future of the Automotive Industry?

What Future of the Automotive Industry?

What Future of the Automotive Industry?: We did not wait for the Covid-19 pandemic to change the way we work and travel, but it has had an unprecedented impact on the automotive industry around the world. The need to distance oneself from others, to work from home, and to protect loved ones has affected both the desire and the ability to travel. At the end of the lockdown, drivers’ expectations and priorities changed. As car manufacturers try to adapt to societal transformations linked to mobility, what new types of competition do they have to face?

The automotive industry, one of the most successful since the end of the 19th century, has been seriously undermined over the past decade. The main cause? The significant investments necessary for the ecological transition demanded by consumers (individual environmental footprint, fuel costs) and policies (vignettes, taxation). The United Kingdom has even just announced that it wants to ban internal combustion engine vehicles from its territory by 2030, placing itself at the forefront of the “green revolution”.

The need or desire to own a car has also diminished over the years, although the vision of city dwellers and provincials differs somewhat. Yet the years 2000 and 2010 were marked by unprecedented technological advances. For example, it was normal to have a vehicle-consuming 10L/100km in 2010. Today, consumption capped at 5L/100km is a request from buyers, even SUVs. The gap in terms of environmental performance is therefore phenomenal. Is it sufficient? Certainly not, but there’s no denying the tenacity of automakers to create more capable vehicles in response to demand.

The automotive industry, already weakened, is, therefore, more than ever in difficulty with the global pandemic and teleworking which is gradually becoming the new normal. Added to this is the race for innovation to impose itself in the face of the progression of ever more creative competitors and the economic crisis which is limiting buyers’ budgets.

The model of the individual buying a new or used vehicle from his dealer is probably living in his last years. What mobility models do we see emerging in this context?

What Future of the Automotive Industry?

Mobility that adapts to the different needs of users

Rather than relying on a personal vehicle, supporting its constraints and incidents, consumers are now looking for modes of mobility that adapt to their immediate needs. Traditional manufacturers are thus challenged in their very relationship with drivers by service players from other sectors:

The development of these new mobility models has elsewhere pushed manufacturers to invest in these services, such as Free2Move for PSA or Zity for Renault. Manufacturers need to reinvent themselves with new business models and more agility to compete with companies not traditionally associated with transportation getting into racing like self-driving taxis (Waymo Google) and electric personal vehicles (Alibaba).

State-of-the-art digital ecosystems at the service of this new mobility

Connected, autonomous, shared, and electric mobility is on the rise and requires massive digital ecosystems to provide a reliable mobility service and an exceptional driving experience. From the infrastructure that processes the data to the onboard applications available to the driver, technology is a pillar in the development of new mobility.

For example, edge computing and 5G will be essential in the development of autonomous vehicles, to process the enormous amount of data necessary for their operation with extremely low latency. The cloud and super-computing fully have their place in the design, manufacturing, and repair of vehicles. Ecosystems of secure data platforms create value for the entire mobility chain.

Finally, digital technology will be essential to support the decarburization of the entire sector, whether directly (by equipping vehicles with energy-efficient edge servers, for example) or indirectly (by making it possible to build more efficient IT infrastructures, which therefore consume less energy and carbon).