What’s in store for the auto industry?
Automologist LILY foresees two major automotive trends in the near future, and maybe an unpleasant outcome.
There are reports saying that the automotive market is still bright and blooming despite the weakening world economy. When we analyse the growth of the industry from the west of North America to the east of China, the automotive market growth is actually uneven in different regions. Regardless, moving into 2015 and thereafter, there are trends that will affect the industry across the board.
Economy of scale for components manufacturing. According to the Society of Motor Manufacturer and Traders, there would likely be a consolidation of automotive suppliers. There will be a smaller number of large global players, and we can see the trend already starting; OEM’s are decreasing the manufacturing architecture to produce greater numbers of common components that can be applied to different models, allowing there to be wider range of models but at minimal increase in cost.
Connected cars. We have written at length about connected cars, and this is a major trend moving forward. Connected cars are part of the bigger picture of Automotive Bring Your Own Device (BYOD). The costs of electronics and software content are much lower now, by at least 20%, as compared to ten years ago. This is palpable even with electronic devices or services which we use every day, such as broadband internet, computers and smartphones. More than 90% of the innovation will come from the vehicle’s electronic system and the vehicle’s design-to-market lead time will shrink from the present three to four years to only three to four months!
A research paper published by Visiongain reported that BYOD is set for exponential growth in the next few years; this will be a global effect. The report, published in August 2014, forecast that the global Automotive BYOD revenue was expected to hit USD26.4 billion that year. This will be an interesting trend that changes not only the automotive industry but the IT and telecom-base industries as well; we will be seeing a convergence of different industries into a new automotive landscape.
The aftermath. It’s exciting but quite damaging. The more we are dependent on technology and connectivity, the less we are going to use our physical bodies. Humans now need to go to the gym to use mechanical machines to exercise our bodies (which used to be a normal daily activity in bygone days). Will there be a day when we will need to go to a centre before we can utilise our muscles, memory and motor skills? I have a love-hate attitude towards technology, but I hope this is just my wild imagination!
images: treehugger.com (top), MINI, Disney’s Wall-E