Why the game is changing in the automotive industry

Its hard, if not impossible, to predict the future. But looking at the automotive industry, it is safe to say it will change dramatically over the next ten years. Key ‘game changers’ are teaming-up and set to re-define the market. Car and truck manufacturers will have to follow, or loose the game.

 

Rob Kroon, Consultant

OEM’s such as Mercedes-Benz, Peugeot-Citroën and Toyota focused for the last sixty years their research and development mainly on the optimisation of engines. Most parts of a car are made by general suppliers. But the engine, companies such as Mercedes-Benz, Audi and BMW always stressed to emphasize the quality of their product, is a genuine design made by the company itself.

 

The ‘branded engine’ of OEM’s is running out of fuel. Within the industry, suppliers are the driving force behind this development. They push the OEM’s to update their technology by offering cleaner and more efficient solutions. But, because OEM’s are attached to their ‘self-designed’ combustion engines - in terms of both engineering and production facilities a large and by its nature longterm investment - they are slow in adopting this new cleaner and more efficient technology.

 

As a result, game changers who operate in niche markets start to use it and gradually go mainstream. Of course Tesla should be mentioned here, which started with an overpriced 100% electric sports car only a few could effort. But the company now looks ready to enter the mid-price market with its new Model 3.

 

City governments and technology giants

The drive for change is not only coming from within. The pressure on the automotive industry to change its ways is also increasing from the outside. First, cities struggle with heavy air pollution and its negative impact on the health of their inhabitants. No wonder, the municipalities of Paris, Madrid and Athens want to ban diesel cars and vans by 2025. And they are right to do so. With already more than half of the world population living in cities or urbanised areas, the United Nations (UN) expect in 2050 this share will be 66%.

 

Second, after disrupting the music and publishing industry, technology giants are now moving towards the automotive industry. And although efforts to build their very own car concept, companies from Silicon Valley such as taxi-app Uber, Apple and Alphabet - the mother company of search engine Google - pave the way for other tech-based players in the mobility market. For example the French ride-sharing platform BlaBlaCar and the Dutch electric car sharing concept eCARSHARE, which both enable users to book a car by using a simple app.

 

Climate change

As developer of sustainable business models for mobility solutions FIER Automotive work closely together with all relevant ‘game changers’ in the automotive industry. For example, in the eGLM-project we work together with local and provincial governments, logistics companies and OEM’s to make the first steps towards a market for heavy 40 to 50 ton electric trucks. In this project we connect the key game changers in the automotive industry. By doing this, we don’t just want to create a platform for innovative clean mobility solutions. More importantly, we want to contribute to a world with less air pollution.

 

Making the automotive industry sustainable and providing new mobility solutions, ultimately does not just improve air quality in cities. It also contributes to the reduction of CO2-emission, an ambition we will have to pursue to be able to pass on a world without climate change, melting ice caps and rising sea-levels.

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