The automotive industry is changing at an unprecedented pace. The industry is undergoing a transformation from an industry dominated by franchised dealers to a business with multiple alternative forms. The implications of this transformation range from the unbundling of dealer businesses to tighter relationships between manufacturers and consumers. However, the future of the automotive industry is far from clear.
As a result, automakers will need to develop a variety of new powertrain technologies over the next decade. Those technologies could include fuel cells, battery-powered vehicles, and electric mobility. It is essential for automakers to understand how these technologies will transform the world of mobility. The automotive industry will have to design vehicles that will be durable, fuel-efficient, and low-maintenance.
As these changes take place, automakers will need to partner with new digital firms to remain competitive. They will also need to share more components and vehicle platforms, reducing costs and simplifying operations. In addition, stable market shares will give way to winner-take-all markets and specialist technology markets. As a result, companies that can respond to these changes will thrive in the automotive industry.
The modern automobile was first developed in the late 1800s, based on the internal combustion engine. It was invented by a Dutch scientist, Christiaan Huygens. By the end of the nineteenth century, a horseless carriage was developed. Steam engines, while producing high speeds, were inconvenient to start and had limited range. Battery-powered electric cars gained a significant share of the automobile market in the United States by 1900. However, they were limited in range and charging stations were difficult to come by.
The automotive world is one of the industries that has benefited from globalization. Consumers are increasingly valuing cost over brand and the automotive industry is no exception. By reducing costs and optimizing operations, automakers are able to cut costs while digitally reinventing their business. They can also provide enhanced customer experiences, provide continuous security and connect drivers to their cars.
While fully autonomous vehicles are unlikely to become common in the automotive industry by the 2020s, they are already a reality in certain environments. For example, these vehicles are being used in mining and farming. Besides reducing labor costs, these applications are also reducing CO2 emissions. By optimizing the driving process, AVs can cut CO2 emissions by as much as 60 percent.
A few decades ago, Honda’s decision to open a factory in Ohio marked an important inflection point for the automotive industry. The gasoline automobile was the dominant force in the industry. In 1979, Honda decided to expand its operations to the United States. The automobile industry was reshaping itself in many ways, but the automobile remained the dominant force.
As the automobile industry became a global force, it was no longer necessary to manufacture cars domestically. The automobile revolution had already changed the economic landscape of developed nations. It displaced steel as the dominant export in America and moved the industrial center of gravity from the Northeast to the Midwest. This new industry also boosted the purchasing power of the middle class, and it was the key to transforming the US and other advanced countries.