Archive for August 2016

Autonomous Driving Market Estimated $560 Billion

The market for autonomous cars and driving software has been experiencing significant growth at both the global and regional level. According to one industry expert, this may trigger a change in the entire value chain as a whole with OEMS And suppliers hoping to get a piece of the $560 billion pie.

“Recent innovations and disruptive technology will make autonomous driving a reality in the foreseeable future with fascinating new mobility features and potential efficiency and safety benefits,” explained Salvador Zarate, a partner at global management consulting firm AT Kearney.

driving“We are seeing some Middle East countries making moves to embrace smart cities, with autonomous cars a major part of that evolution,” he continued.

AT Kearney just released the results of its most recent study, titled “How Automakers Can Survive the Self-Driving Era.” The report involved conducting interviews with over 150 automotive decision-makers from around the world with the intention of identifying products, services and partner strategies with with OEMs and suppliers can push themselves forward in the autonomous driving race.

According to the report, the newly emerged autonomous driving chain involves a whole host of players spanning from component suppliers and software integrators to infrastructure and data providers. A handful of these firms operate in multiple business fields, but the report stated that all of the players would likely be competing for leverage in the same autonomous driving market once the autonomous car revolution undergoes its next evolution.

The report also predicts the emergence of crucial fissures in the auto industry as it is today. Alongside OEMS, service providers are expected to create their own fast growing and independent industry that will expand to compete with the earnings generally associated with OEMs. Service providers’ consumption-dependent revenues and revenues from entertainment, multimedia and information offerings could actually already exceed that earned by traditional OEMs.

In other words, the vehicle market will likely split into three major sections: premium, low-cost and drones.

Mercedes-Benz S 500 INTELLIGENT DRIVE - autonom durch Überland- und Stadtverkehr Mercedes-Benz S 500 INTELLIGENT DRIVE - autonomously through country roads and inner-city traffic

“The business models of mid-range providers like Toyota, VW, SEAT and Citroen are being called into question,” explained Michal Romer, head of Digital Business in Europe, the Middle East and Africa at AT Kearney and co-founder of A T Kearney Digital Labs. “Following the example set by technology pioneers such as GM, BMW, and Ford, automakers need to forge strategic alliances with partners outside the industry if they want to deliver attractive telematics solutions, for example.”

According to experts at A T Kearney, even premium car brands now depend on external expertise to continue to supply the latest in automotive technology. The current auto development race involves something called a “hub-and-spoke” architecture where mobility serves can only be provided once manufacturers and developers from multiple parts of the industry come together to develop something. Take the plans between BMW, Intel and Mobileye to join forces to make the fanciest new BMW’s ever. GM recently partnered with Lyft as well.

“OEMs are going their bit. Now it is up to governments and consumers to help pioneer mobility concepts make the breakthrough in the Middle East,” concluded Zarate.