PwC study: The European automotive market will face radical change in 2030. Thanks to novel sharing concepts, the stock could fall to 200 million vehicles. However, at the same time cars will have to be changed much more frequently because they will be used more intensively. Manufacturers and suppliers should actually welcome the increased demand – but their profits are under pressure
Frankfurt, 11 September 2017
Within only a few years, the European automotive market will change dramatically compared with today. This is the picture outlined by auditing and consultancy firm PwC in their new study “eascy – The five dimensions of automotive transformation” being presented at this year’s IAA. The study has produced a whole series of seemingly contradictory findings. For example, by 2030 the vehicle stock could fall by 80 million to only 200 million cars, while traffic on the roads will become even heavier. Another example: Although the number of new registrations will rise considerably, many conventional manufacturers and suppliers will come under pressure.
“This picture only appears to be contradictory. This automotive revolution will see many rules that the industry has become accustomed to over many decades being turned on their head”, notes Felix Kuhnert, PwC’s Global Automotive Leader. Of particular importance here is the growth of low-cost sharing concepts predicted by PwC. As a result of this development: “In only a few years’ time, today's norm where most people drive themselves in their own vehicle will only be one mobility concept among many” explains Christoph Stürmer, Global Lead Analyst at PwC Autofacts. The PwC study anticipates that as early as 2030, more than one in three kilometres driven on Europe’s roads will be under one of the many forms of “sharing”.
This trend towards “sharing” will be coupled with two megatrends in automotive technology – the electrification of drive systems and huge advances in the development of self-driving cars. Under PwC’s scenario, by 2030 for four out of ten kilometres travelled it will no longer be the driver steering the car, but rather the car itself. Furthermore, 55% of all new vehicles may be electric cars, while the conventional combustion engine will slowly die out. “The various different trends will reinforce each other”, says Stürmer.
“For instance, electric vehicles are less susceptible to failure thanks to their simpler power train – which is a significant advantage where vehicles are being shared and used more intensively. Self-driving cars, in turn, could effectively become ‘robotaxis’ if they are combined with sharing concepts.”
Taken in combination, the various megatrends will mean that “road traffic as a whole will change radically”, says Stürmer. With more and more people turning to car-sharing models, there are likely to be far fewer car owners by 2030. However, at the same time individual traffic will increase massively. Aside from population growth, one of the reasons for this is that self-driving vehicles will also be used by people who cannot drive today themselves. Another reason is that the development of fully-autonomous cars means that there are likely to be empty trips, because clearly the ‘robotaxis” will have to travel from A to B to collect new passengers. “The roads will definitely become more full”, says Stürmer. Nevertheless, he does not anticipate chaos – quite the reverse: “Thanks to increasing connectivity, individual traffic will be much easier to organise in the future. “Consequently, the PwC study describes the fourth megatrend as “connected”, in addition to the other “electrified”, “autonomous” and “shared” megatrends.
What does this trend mean for manufacturers and suppliers, particularly in Germany? The PwC scenario assumes that the number of annual new registrations in Europe may increase by one third to more than 24 million cars by 2030; this would be the only way to compensate for the higher wear and tear on cars due to car-sharing concepts. This large volume will require car manufacturers and suppliers to make additional investment in new production and development capacity – for new, highly specialised vehicle concepts at much lower prices.
“Automotive groups and their suppliers will have to make critical decisions in the years ahead”, believes PwC expert Stürmer. On the one hand, while they will have to contend with falling margins – mainly due to pressure from the major fleet operators – at the same time they will have to significantly increase their investment in new factories, electro-mobility and the other megatrends. Simultaneously, new competitors from the technology industry will see the opportunity to push into the market. A parallel study from PwC strategy consulting firm Strategy& has estimated that conventional players’ share of global industry profits may fall from the current figure of 85% to less than 50% by 2030. Stürmer’s forecast is therefore that: “In this scenario, the only companies that can survive in the long-term are either those that prevail as a clear innovation leader on the product side, or those that recognise that mobility is no longer a product, but rather a service and offer their customers comfortable and low-priced offerings that are simple to use – in other words, offerings that make their life ‘eascy’.”
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