Automotive Industry Trends 2020 That Will Transform The Future Mobility

The global automotive industry expected to reach USD 8.72 Trillion by 2030.

Global Automotive Industry Scope:

The automotive industry is a main economic force throughout the worldwide. It produces around 60 million cars and trucks per year and automotive industry is responsible for almost half the world's consumption of oil. The industry provides millions of jobs with good benefits has heavy linkages with supplier industries. This industry is more than 100 years old and initially started in Germany and France. The U.S., Europe and Japan are the countries which together account for approximately 80% of world sales. The automobile industry is a major innovator, investing around USD 93.10 billion in research & development related activities and production. The auto industry plays a crucial role in the technology than any other industries and is one of the largest investors in research and development. Automotive manufacturers have largely invested in achieving air quality improvements and in developing diverse vehicles that can run on alternative fuels including from sustainable sources using both gasoline or diesel engines and electric power.

Global Automotive Industry Dynamics:

Increasing investment in research & development, upsurge in technological improvements to run automobiles on different fuels, growing sales of passenger cars and rising usage of alternative powertrain technology are some major factors contributed to the increasing demand of global automotive market. For example; Engine improvements can reduce the CO2 emissions from new model of vehicles. Around 49% of new cars release less than 120 g of CO2 per kilometer and car fleet CO2 emissions declined by approximately 31.7% from the last few years. Customers, as well as different regions of the world, inclined towards different technologies, thus automakers are heavily developing a range of automobiles that run on different fuels. China remained the largest single market with around 28.08 million car sold in 2018, and Germany is the biggest market stable automotive market at 3.72 million. Russia is showing double digit growth in automotive sales for the second consecutive year after four years of falling sales.

SUV and crossover cars is growing with the fastest growth rate and reached sales of around 6.5% in 2018 to a record 29.77 million, also it acquired market share at 36.27% of the total passenger car market which is up by 2.6 %. Automotive industry have kept them busy with new utility vehicle launches and seeking to hold strong footprints in capturing market share. According to the Society of India Automobile Manufacturers (SIAM), the passenger vehicle segment added major grip with compact SUV sales rose by around 9%.

The mergers between multinational automakers will spur the global expansion of automotive industry through adapting greater capacity to penetrate into new markets quickly and at lower costs. Furthermore, rising disposable income is another factor which resulted in strong growth of the automotive industry. However, globalization and increasing competition in the market are changing the appearance of the automotive industry.

Recent News:

In 2018, Volkswagen Group sold the passenger cars and LCVs with a 2% increase to around 10.4 million sales apart from heavy commercial vehicles and buses. Toyota Group was in 2nd position with 10.4 million sales up 1.2%, and Renault-Nissan was third with 10.3 million sales increased by 0.9%. On the other hand, Toyota Company maintains its leading position as the world’s best selling car manufacturer with a margin of over 1.3 million car sales over Volkswagen.

VW and Ford move ahead with technology sharing to save costs:

On May 15, 2020; Volkswagen Group and Ford Motor Co. are moving ahead with some technological plans to work together on electric and self-driving vehicles even as the coronavirus slowdown other projects. This deal is expected to close in the next month, as both companies are recognizing a necessity to share the large investments required to develop battery-powered and autonomous car.

Top Automotive Industry Trends 2020:

• Electric vehicle:

The internal combustion engine is a basic element of the auto industry for over an era, but environmental regulation and consumer concerns are driving a shift to electric battery powered cars. The growing adoption of electric cars is expected to continue its dominance by expanding charging infrastructure and developments in battery technology. Automotive industry is increasing their EV launch plans to comply with stringent regulations in emerging market. Due to COVID-19, there has been delay in EV plans but by the end of 2022 there will be more than 500 different EV models available around the world.

In automotive industry, the sales of passenger EV sales rose from around 450,000 in 2015 to 2.1 million in 2019. At present, electric share of total vehicle sales is small, but it is growing at a fast pace. By the end of 2040, more than half of all passenger vehicles will be electric models. Europe and China will attain much higher penetrations than emerging markets. Battery electric vehicles account for majority of share, but plug in hybrids will also gain popularity over the next 10 years. In spite of this, EVs will account for around 7.29% out of 1.4 billion passenger vehicles that will be on the road in 2010, but this percentage will rise at around 30% by the end of 2040.

• Shared mobility:

Ride hailing apps like Uber, Lyft and Bolt are becoming more popular in recent years. The popularity of such types of shared mobility is set to accelerate the expansion of automotive vehicles in the 2020, as technology aspects continues to support these trends while consumers are searching for new ways to save their travel money. Shared mobility is transforming the customer’s expectations of car ownership. New mobility services are emerging transportation mode enabled by integration of advanced technologies and wireless connectivity for more convenient, and flexible travel. Several leading automotive industry manufacturers such as Volvo, GM, Ford, Mercedes, etc. are partnered with some technology and mobility companies like Google, EasyMile and Apple, also with new mobility companies like Uber, Lyft, and Zipcar. Together these companies are working on the development of shared autonomous vehicles. Shared mobility has made significant transition in the worldwide on account of demographic trends including rapid urbanization, the concept of smart cities and densification. For example; in October 2015, the United States was hub to around 29,500 shared bikes at 3,300 stations covering approximately 104 U.S. cities.

• Combination of new Technologies:

The recognized automotive industry increasingly shifted to modern technology. Nowadays, customers want a seamless connectivity experience, where car owner can stay connected to their favorite apps, music and entertainment. The Internet of Things (IoT) offers a great potential for interconnectivity which can be linked with smart vehicles into a network. T his provides the opportunity of optimizing vehicle performance and driver experience. This trend also enhances revenue growth opportunities of IC manufacturers to integrate enhanced functionality into more powerful microprocessor.

The advanced driver assistance system (ADAS) is specifically created to ease the driver’s workflow during the driving process. This system is based on embedded vision technology, which contains of vision systems detects the driver error, road obstacles, other vehicles, and pedestrians. Also, these vision systems are capable of efficient identification and real-time tracking and it normally requires specialized knowledge of image acquisition and processing techniques.

Now, automotive industry is adopting artificial intelligence (AI) and machine learning (ML) technologies to automate the entire process of a vehicle including its infotainment system and its application preferences. This makes vehicles to reach new level that connect to smartphones or wearable devices

• Autonomous Vehicles:

An autonomous car is a self driving vehicle capable of sensing its driving process and operating without human participation. Along with alternative technological systems such as electromobility, semi-autonomous vehicles are the biggest trends in the automotive industry. In future, autonomous driving will progressively demand for more reliable network based structures, requiring redundant, real-time architectures. Autonomous cars will have sophisticated systems that include high performance computers and number of advanced driver assistance system (ADAS) sensors such as high-resolution cameras, RADAR, and LIDAR. For example; around USD 80 billion investments have been carried out in autonomous vehicle technology over the past three years across through partnerships and acquisitions. Technological developments and automotive industry trends have led to several innovations in the vehicles of the future. With Technological advancements and the upcoming automotive industry trends, the automotive industry is shifting its focus toward platform-based services, enhanced products for electrification, and increased level of automation.