In 15 years, the center of auto production will be in China
The study predicts three possible results of economic, technological and political developments over next decade and a half.
One favors the growth of mobility services or telematics as advances in technology allow drivers to become increasing more connected over social networks and new media as society becomes ever more mobile and tech savvy.
A second envisions a global economic stagnation that makes cars less affordable as personal spending power decreases from higher taxes, inflationary pressures and the simple lack of commercial growth.
A third involves an austere sustainability movement making motor vehicle production and operation economically unattainable for the rank and file – a result of highly restrictive regulation.
The report was largely based on lengthy interviews with individuals both within the industry and outside whose jobs basically involve worrying about such things.
“Companies have to face current and future opportunities and challenges to make the journey ahead a rewarding one,” said Thomas Wendt on behalf of the Roland Berger firm.
He emphasized the movement of the center of auto production to China is somewhat inevitable, despite the reality of urban areas so populous the ownership of any vehicle is problematic.
“The industry’s center of gravity will clearly shift,” said Juergen Reers, managing director of Roland Berger Strategy Consultants in North America. “Core technologies will change, new forms of organizational set up will emerge – employees will have to meet new requirements and new business models.”
He continued to say the exponential growth in demand for vehicles in Asia would force automakers to cater to the particular needs of Asian consumers. This shift may well endanger hundreds of thousands of jobs in the U.S. and Europe, as it is obviously easier and cheaper to build cars for Asians in Asia.
This tendency will be exacerbated by the number of aging workers expected to retire over the next decade in Europe and the U.S.
The sheer magnitude of the coming changes may easily require The Big Three to perform a lively market dance, just when they are once again finding their feet.
The demand for commuter cars will continue regardless of China, due to emerging markets in India, Brazil and Russia as well. “But also in mature markets like the U.S. and Europe, the study is forecasting strong growth rates for smaller car segments due to changes in customer values,” the report states.
Electric vehicles are expected to continue growing steadily and constitute a significant piece of the market by 2025. Pure electrics may still only be 10 percent of the total market but hybrid vehicles are expected to make up nearly half of sales alone.
Projecting the future is tricky business, but identifying trends is a much easier task. The real trick is to intuit the way trends will interact and alter the course of history.