Even a conservative reading of disruption in the automotive sector suggests that by 2040 nearly one in three cars on the world’s roads could be conditionally autonomous (self-driving), according to a paper by management consultant McKinsey & Company.
Written by Paul Gao, Hans-Werner Kaas, Detlev Mohr and Dominik Wee and called “Disruptive trends that will transform the auto industry” the paper draws on the findings of McKinsey’s Automotive revolution — perspective towards 2030; How the convergence of disruptive technology-driven trends could transform the auto industry.
That study also examines the rapid, high-disruption model, which arrives at a very different outcome: pretty much 100 per cent conditional autonomy for the world’s automotive fleet.
According to the authors, like all other markets today the automotive industry is grappling with “development in emerging markets, the accelerated rise of new technologies, sustainability policies, and changing consumer preferences around ownership.”
These forces manifest in quite precise ways in the sector, with McKinsey describing four kinds of disruptive technology-driven trends: diverse mobility, autonomous driving, electrification, and connectivity.
Despite an acceptance by industry leaders of both the scale and velocity of change, “… there is still no integrated perspective on how the industry will look in 10 to 15 years as a result of these trends,” according to the report.
To this end, McKinsey offers eight key perspectives on the sector. Not so much predictions, as ideas for industry participants to organise their thinking around:
- Driven by shared mobility, connectivity services, and feature upgrades, new business models could expand automotive revenue pools by about 30 percent, adding up to $US1.5 trillion.
- Despite a shift toward shared mobility, vehicle unit sales will continue to grow, but likely at a lower rate of about two per cent per year.
- Consumer mobility behaviour is changing, leading to up to one out of ten cars sold in 2030 potentially being a shared vehicle and the subsequent rise of a market for fit-for-purpose mobility solutions.
- City type will replace country or region as the most relevant segmentation dimension that determines mobility behaviour and, thus, the speed and scope of the automotive revolution.
- Once technological and regulatory issues have been resolved, up to 15 per cent of new cars sold in 2030 could be fully autonomous.
- Electrified vehicles are becoming viable and competitive; however, the speed of their adoption will vary strongly at the local level.
- Within a more complex and diversified mobility-industry landscape, incumbent players will be forced to compete simultaneously on multiple fronts and cooperate with competitors.
- New market entrants are expected initially to target only specific, economically attractive segments and activities along the value chain before potentially exploring further fields.
The authors note, “There are many tough, fundamental, or even existential questions that are looming for automakers and suppliers. Some commentators suggest these disruptions will mark the decline of the automotive industry. But in our view, growth in the personal mobility market will accelerate as new sources of recurring revenues supplement slowing growth from onetime vehicle sales.”