‘Technology to boost investment in automotive industry’

Stefano Aversa

Stefano Aversa

AS demand for technology and connectivity increase in the automotive market, car manufacturers across the world will need to do business not as usual and attract significant additional investments to finance connectivity, autonomous driving, sharing and electrified power trains.

Indeed, in the face of global automotive slow down and economic recession, countries like Nigeria that is currently pursuing a policy that targets revamping its automotive industry may need to do more to attract investment and produce quality vehicles that meet global standards.

According to a report by consultancy AlixPartners, the future of the industry calls for significant additional investments which may lead to a new phase of consolidation and partnerships in the global auto industry.

With the need to direct investments into increasing volume of manufacturing and attracting spare parts builders in Nigeria, the report said: “over the next five years the global automotive industry faces a reduced market growth, down from an annual 3.1 per cent to an annual 2.6 per cent”.

It said that the industry must invest tens of billions of Euros in building capabilities, particularly in the areas of car connectivity, autonomous or assisted driving, sharing, and electrified powertrains and components Vice Chairman of Alixpartners, Stefano Aversa said in the report, “We expect a considerable wave of consolidation and partnerships in the auto industry.

It may start with the merger of two OEMs, but will also encompass the suppliers and new entrants from the technology sector.”  “Over the next four years, the global market volume for connectivity services and hardware will double from an estimated $20billionn to $40billion, and more than half of it will be services and apps,” the report said.

Data from Connected Car Forum (CCF) noted that more than 20 per cent of vehicles sold worldwide in 2015 included embedded connectivity solutions and more than 50 per cent of vehicles sold worldwide in 2015 to be connected – either by embedded, tethered or smartphone integration.

Moreover, it is very likely that every new car to be connected in multiple ways by 2025. “The self-driving car does not come in one big bang.

It is a gradual development, and with self-parking assistants, adaptive cruise controls and lane keeping assistants the first steps have already been taken.

In five to ten years, fully autonomously driving cars with “hands-off experience” will be technically feasible on motorways, but we expect that liability questions and driving constraints will limit the use of autonomous car to specific applications and to defined environments,” the report added “Nearly all OEMs have started to experiment with car sharing, mostly in cooperation with car rental companies.

However, in order to build a leading car sharing business, up-front investments are high and earnings difficult to sustain. “Despite a sales growth of 60 per cent in 2014, EVs remain a niche market with a global share of 0.4 per cent in total sales.

But the electrification of the drive train is here to stay. Electric drive trains are also used in hybrids, in range extenders, and in fuel cell cars,” the report stated.

The report said that technology development and customer acceptance are way ahead of the respective regulation and infrastructure, stating that liability rules for autonomous driving are missing in total.

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