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Next-gen tech to drive car sales in coming years

Posted: 06 Jan 2016     Print Version  Bookmark and Share

Keywords:Stanford University  automobile  McKinsey  infotainment  smart mobility 

Consulting firm McKinsey has released a report indicating that the overall automobile sales volume will nearly double, but it is not the mechanics that sells the cars, nor their electronics. In the future, smart mobility services and connectivity services will be the driving factor for this increase in market growth.

In fact, while individual motorised mobility seems to hit the limits in many European and Asian megacities, global automobile sales can even speed up their growth over the next ten to fifteen years, the forecast added.

Worldwide, the sales volume of the automotive industry will rise from today's $3.5 billion to $6.7 billion by 2030, predicts a study conducted jointly by McKinsey and the Stanford University. This translates into an average annual growth rate of 4.4 per cent, significantly higher today's long-term average growth rate of 3.6 per cent. The demand will be excited and driven by innovative mobility offerings and connectivity services.

By 2030, such services will add up to $1.5 billion and thus account for almost one quarter of the automotive industry's total sales volume. In contrast, sales associated to the car as a product will slow down to a rate of about two per cent per year (which still means positive growth).

According to Detlev Mohr who oversees McKinsey's European automotive consulting business, the upheavals in the automotive industry are already becoming visible.

"Connected Driving, electrification of the power train, and new mobility concepts are already challenging the traditional car makers," he said. The study however shows that the growth of the entire industry segment still has potential to accelerate, in particular through new fields of business like car sharing, specific infotainment offerings. "It has yet to be seen how and to which extend traditional car manufacturers versus new players will be able to secure new sources of profit," he said.

The classic sales model in mature markets such as Europe and North America faces stagnation, but other regions still offer high growth potential, the study concludes. In 2030, the authors expect that 75 million vehicles can be sold in Asia and other growth regions. This is 28 million more units than in 2015. To tap this huge potential, the carmakers need to better understand the markets and their varying conditions at the city level. "In the medium term, the car markets in New York will be more similar to the market in Shanghai than in rural states like Kansas," Mohr said.

As the driving forces for automotive demand, the study identifies the following trends:

Autonomous driving

In the best case, if the legal and regulatory obstacles can be removed at the same speed as the technological progress, up to 15 per cent of the new vehicles can be driven completely autonomously in 2030. The improvement of existing and development of new driver assistance systems will gradually lead the users to this state.

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