Planet-9 Porsche Forum banner

1 - 1 of 1 Posts

23,161 Posts
Discussion Starter #1
As the number of urban dwellers swells in the coming decades, car ownership rates in many global cities are expected to shrink, forcing automakers seek new routes for revenue growth.
The growing cities—66 percent of the global population is estimated to be classified as urban dwellers by 2035—will need to manage congestion if they are to remain economically viable. Fortunately, we are living in an age of convergence with young people deferring getting their driver’s licenses, mass transit options in major cities multiplying and car sharing/pooling on the rise, ensuring that congestion management will be successful. As a result, global new car sales growth could slow, resulting in a worldwide market that tops out at 100 million vehicle sales per year after 2025 or so.

The flattening of sales could pose a major risk for automakers, which have been increasing global manufacturing capacity to an extent that it is expected to hit 120 million units by the mid-2020s, exceeding demand by 25 million units. New plants will still be needed in developing regions, while old factories in mature markets will have to be shuttered. For the first time in the history of the industry, the automakers will need to pay for these investments with no net new growth in the market!
To offset the expected flat lining of the market, carmakers will need to shift their sales focus from unit volume to other businesses.
They must refashion themselves as providers of mobility. Just as the music industry went from selling records and CDs to delivering downloads, automakers must expand to include marketing the mobility experience. This will require the industry to produce vehicles integrated with software, as well as services and lifestyle products ranging from the environmentally-friendly to luxurious, with a goal of letting consumers use their time sitting in traffic to work or to be entertained.
The services will optimally be married to the emergence of self-driving vehicles that will let consumers safely engage in work or leisure activities while on the road. These advances could reverse the trend toward a flat market as consumers test-drive the new technology, but the full impact of these developments isn’t expected to be felt until 2050. These technical developments are already underway in the form of advanced driver assistance systems that allow for parking assistance, adaptive cruise control, lane-departure warnings and forward-collision alerts. The arrival of advanced driver assistance systems will likely expand the need for continuous data, giving manufacturers another avenue for expanding beyond the traditional car ownership model.
Phil Gott is senior director, long range planning, IHS Automotive
Posted December 5, 2014

1 - 1 of 1 Posts