Home' Forge : Vol 2 No 1 Contents 8 // fast lane
Speeding towards profound
Predicting how the global automobile industry
will look in 10 to 15 years
Picture this: a fully autonomous car, of which you own a ffth share,
drives you to work. You videoconference with work colleagues in
London, check emails, pay bills, consume social media and use the car
like a second ofce.
Welcome to the imminent transformation in the global automobile
industry -- a disruption so profound that experts cannot agree on what
the industry will look like in even a decade. Mobility, self-driving
vehicles, electrifcation and connectivity will change cars as we know
them within a decade.
'Given the widespread understanding that game-changing disruption
is already on the horizon, there is still no integrated perspective on how
the industry will look in 10 to 15 years,' wrote McKinsey & Co in its
latest report on the automobile revolution.
McKinsey made eight insightful predictions:
1. New business models could expand automotive revenue pools by
about 30 per cent, adding up to US$1.5 trillion. McKinsey predicts
that on-demand mobility services (as people order cars) and data-
driven services will boost the global auto industry.
2. Slowing sales of cars: The annual average growth rate of about 3.6
per cent is expected to drop to two per cent by 2030 as car-sharing
and e-hailing become more prevalent, says McKinsey. Fewer, but
more expensive, tech-enabled cars are likely.
3. One in 10 cars sold in 2030 will be shared. McKinsey says the
traditional model of car sales will be complemented by a range of
on-demand mobility solutions as consumers use multiple forms
of transportation and goods are delivered to them, rather than
fetched. The need to have full ownership of cars will recede in large,
4. Car markets will be
segmented by city: McKinsey
says the type of city will be
a key indicator of mobility
behaviour: heavily congested
London, for example, will
have diferent mobility and car
needs than rural areas, which
will continue to favour private-
5. Up to 15 per cent of all cars sold in 2030 could be fully
autonomous: Advanced driver-assistance systems in fancier new
cars are already conditioning drivers to semi-autonomous vehicles.
By 2020, commercially available, fully autonomous vehicles could
be seen on roads, provided regulatory and technology issues are
6. Electrifed vehicles will account for 10–50 per cent of all new cars
sold by 2030: McKinsey says stricter emission regulations, lower
battery costs, and more widely available charging infrastructure
will drive demand for electric vehicles. Adoption will be highest in
densely populated cities.
7. Car manufacturers will compete and cooperate on multiple fronts:
A new automobile ecosystem will emerge where mobility providers
(like Uber), tech giants (Apple and others) and speciality original-
equipment manufacturers (Tesla, for example) will have a much
bigger role. McKinsey says automobile software will be a bigger
8. New entrants will target the most attractive market segments:
McKinsey says diverging markets will open opportunities for
new players. It wrote: 'While Tesla, Google and Apple currently
generate signifcant interest, we believe they represent just the tip of
the iceberg. Many more new players are likely to enter the market,
especially cash-rich, high-tech companies and start-ups'.
'Disruptive Trends That Will Transform the Automotive
Industry' was published by McKinsey & Co in early 2016.
'Change' the watchword as the digital age
Enabling staff to use new technology is critical
if companies are to survive
Business is bracing for a digital culture shock, with 25 per
cent of the world's economy expected to be generated
digitally by 2020. Eighty-six per cent of executives
believe that the pace of digital change will be
unprecedented over the next three years.
These are key fndings in Accenture’s widely
followed annual technology forecast. The Accenture
Technology Vision 2016 report was based on a survey of
3100 senior information technology and business executives from
around the globe.
The global professional-services frm says more companies will need to
change their products, business models and the people and processes
that support them, in order to capitalise on digital opportunities
and avoid the many threats that digital change poses.
Enabling staf to use technology is critical.
Accenture wrote: 'Many companies, already reeling
from the efects of technology and the changes
they need to make in response, fnd themselves
temporarily overwhelmed -- some even paralysed --
as they absorb the magnitude of the tasks ahead.
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