The future of the automotive industry

The automotive industry is one of the biggest industrial sectors in Europe, and in particular in Germany. The value-added and the jobs provided by the automotive industry constitute an industrial pillar here, where the automotive sector is responsible for 20% of total industrial value-added and 13% of the jobs in industry.
However, the global automotive industry is currently going through a period of drastic changes. New markets are becoming more important, e.g. China stands to become the largest market in the world for the sales of new cars in 2009/2010, while sales are stagnating or even declining on mature markets like those in Europe or the US. The spectrum of vehicles is broadening; in particular, small and very small cars are emerging, creating niches for new market entrants or at least new vehicle concepts. Alternative fuels and alternative engines have become an important field of development after so many years of the focus being on internal combustion engines (ICE) fueled by derivatives of crude oil. Now options like compressed natural gas, bioethanol, biogas and, of course, hybrid electric and battery electric vehicles seem able to win market shares in markets shaped by the growing scarcity of crude oil and the increasing pressure for climate mitigation measures in the transport sector.
These challenges also offer new opportunities for the automotive industry: New mobility concepts may emerge based on the idea of sharing vehicles (i.e. cars, bikes, rides) instead of owning them. Surveys among young people indicate the first signs of such changes. The automotive industry could use this opportunity to extend their business model from simply selling cars to selling mobility and always offering the appropriate vehicle, i.e. a van for a family’s weekend trip, or a two-seater electric car for the commute or the school-run. This study analyses the drastic changes ahead, the related structural changes implied for the automotive industry in Germany and highlights the pitfalls and opportunities resulting from these changes.
The results will be presented in an TAB-innovation report.