Two major shifts that will define the automotive landscape between now and 2025 are the inevitable (and phased) embrace of autonomous vehicles and the spread of the sharing economy.
- Some autonomous vehicle functions are already available from high-end car makers, such as lane assist, adaptive cruise control and self-parking. Others, such as Nissan and Ford, have begun cascading these features into their larger volume, mass-targeted vehicles. While some of these capabilities, such as navigation and auto emergency calling, will be commonplace by 2025, more advanced telematics-based features, such as intelligent parking and features aimed at improving convenience for end-consumers, will differentiate leading from lagging car manufacturers. This is where we believe OEMs will need to focus
- Customers will increasingly focus on the convenience and experience the car offers, and OEMs must do the same. Winning manufacturers will focus on software-driven and customizable aspects of car design, with the mechanical parts increasingly outsourced. OEMs must strike a careful balance between retaining the know-how to prevent lock-in with Tier 1 suppliers, while simultaneously fostering an agile, digitally-driven environment to keep pace with the enabling technology for feature sets.
- The idea of sharing rather than owning a vehicle will only accelerate – impacting sales volumes. In response, OEMs will need to embrace more flexible business and operating models, form personal relationships with consumers and partners, and build or participate in collaborative platforms marked by open application programming interfaces (APIs).
- The daily commute is fast-changing into an end-to-end “mobility experience,” conducted via a collaborative platform. The industry value chain will shift from the traditional supplier-OEM-dealer model, to an interconnected ecosystem of multiple players, including technology companies, infrastructure providers, mobility service providers, utilities and traffic management entities. Players in this ecosystem will need to define their own value proposition and then form partnerships to build and deliver truly differentiated products and services. OEMs will also need to develop trusted relationships directly with customers. Reaching and engaging with consumers across new channels will become increasingly important to OEMs and the mobility experiences that will define success by 2025.
The paper The Road to 2025: A Vision of the Auto Industry Circa 2025 details three imperatives we believe are essential for the future success of all participants in the auto industry by 2025. Download it by filling in the form below.