There is much talk in the auto industry about the impact of what is called ‘mega trends’ on automakers and whether or not they can cope with the expected changes.
So far, the industry has adopted what is useful of these mega trends.
Other aspects of mega trends have not appealed to the industry because they have not yet proven their commercial viability.
The auto industry has adopted most advancement of powertrains, including hybrid, electric and fuel-cell technologies.
Some of these developments were driven by regulation rather than economic reality — as at least 75 percent of the global fleet will still run petrol and diesel 10 years from now.
The industry also adapted to lighter weight and new connected technologies.
Automakers shifted to alliances for better commonality in platforms and parts.
Some of the challenges facing the industry today are overstated.
The success of Tesla with its electric Model S may have proven that the barriers to entry of newcomers have been diminished.
But, the long-term commercial success of the Tesla model has yet to be proven.
Also, if Tesla found little barrier to its entry to the auto industry, it would be easier for the auto industry to reclaim its position as producer of electric cars — if it finds enough demand in the global markets.
The other challenge of course is autonomous driving.
While companies like Google and Apple are interested in the concept, neither of them have made a commercial case of their ideas yet.
Meanwhile, companies such as Audi have made huge leaps forward in applying autonomous technology to their already successful models.
The auto industry is well prepared for future mega trends and will adapt to the competitive consolidating pressure that have ruled the industry for the past century.
However, those companies that cannot afford to keep up with the required investment for innovation may ultimately fall victims of the mega trend change.
The only force that would shape that future is the collective will of the consumers.
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* Adel Murad is a senior motoring and business journalist, based in London.
Email: [email protected]
