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A Watershed Moment for the Automotive Industry

INSIGHT: Automotive

In the next 15 years, electric and hybrid cars will capture more than half of the market. Connected and autonomous driving will open up new earnings potential. Digitization will enable double-digit cost reductions. Is the automotive industry facing its biggest challenge of the past hundred years?

The global car market continues to grow, with new sales expected to rise at an annual average of 2.8% from 2015 to 2023. Taking advantage of that growth will mean mastering the greatest change that the industry has experienced in the past hundred years. That change is being triggered, on one hand, by ever-more-stringent emission regulations, which can no longer be escaped, following the recent high-profile emissions scandals. On the other hand, it’s coming from technological developments and challenges by connectivity, autonomous driving, and digitization of the value chain.

In the coming years, the automotive industry will face its biggest upheaval since before Henry Ford. Such are the findings of the study A Watershed Moment for the Automotive Industry: The AlixPartners Global Automotive Outlook 2016.

In 2030, half of all cars are expected to have an electric or hybrid powertrain, and almost all cars will be connected. To achieve that, the automotive supply chain will undergo large-scale changes, and systematic digitization will reduce the structural costs by a quarter. Online services will heavily influence the driving experience and offer crucial new revenue opportunities. In cities, individual mobility through free-float car sharing will continue to grow. And only organizations that integrate that new world into their strategies will be able to compete and stay relevant in this rapidly evolving industry. Read more here

Compliments of AlixPartners – a member of the EACCNY