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Automobile Industry: What The Future Holds

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We have come a long way from the days of the Model T-Ford. The first car that was produced for the masses came at a time when owning cars was a luxury only a select few could afford. And today, ownership of a car is no longer a luxury but a necessity. In the developing countries, it is still regarded as a symbol of status; however, in the USA and the countries of Europe, it is well neigh impossible to commute unless one owns a car. However, that does not mean the automobile sector has been impervious to financial turmoil. The recession of 2008-09 had far reaching effects on industries across all the sectors. Sectors of the industry which were previously thought of as unshakable were wiped out. And one of the sectors which went through a tumultuous period was the automotive sector. World renowned manufacturers of automobiles saw their fortune tumble. Many of them were either acquired by other companies, while the rest went out of business. One of the brands that comes to the mind is Jaguar Land Rover – the manufacturer of Land Rovers and Jaguar cars. One of the most easily recognizable automobile brands in the world, the company was acquired by Tata Motors in 2008. Since then, the industry has recovered to quite an extent and the future looks interesting – if not absolutely bright – from the vantage point of 2015. So what does the future hold for the industry?

Automobile Industry: What The Future Holds

The best word to describe the times ahead of the automobile industry would be ‘interesting’. According to experts on the automobile industry, the future is going to be disruptive. And the disruption will be caused by two of the giants from completely different sectors, viz. Google and Apple. From the looks of it, both the behemoths are eyeing to be a part of the USD 9 trillion automotive industry. Google has already revealed its self-driving car. Still a prototype, it has been called a self-driving golf cart. While there is truth in the description, Google is known for its flair for turning the ridiculous into the trendsetter. Moreover, automotive research has shown that the share of connected cars is increasing faster than that of the penetration rate of smartphones, wearables and personal computers combined. It, thus, makes complete sense that Google, whose Android platform has over 70% market share in smart devices, would like to go the whole way and get into the automotive sector. As for Apple, the company has not disclosed any plans for getting in the automotive industry. However, if rumors doing the round are taken in conjunction with the projects Apple’s R&D division has been working on, the prospects of an Apple manufactured car looks highly probable. And if there is one company which knows about creating a market for any product it develops, it is the one based in Cupertino. As a matter of fact, CAR, one of the most renowned magazines on the automotive sector, has already declared that Apple has a highly profitable future in the automotive sector.

If the imminent entry of new players are likely to cause a headache for the established players in the sector, the fuel crisis is going to give them a migraine. It has long been known that the global storage of oil is not going to last for much longer, but that has not reduced the fuel consumption level in any way. As a matter of fact, it is increasing at an alarming pace. Manufacturer of automobiles are trying to find alternate sources of power for powering the cars. It is not only the concerns regarding the paucity of fuel that is driving the manufacturers to go for alternate sources of power. Concerns regarding the environment are a driving factor as well. Manufacturers are trying to cut down on carbon emission by vehicles and this has been a major factor behind working on alternate power sources. Tesla with its electric cars has given a glimpse of what the future can be for the automobile industry. Still in its infancy, the number of cars produced by the company are agonizingly low, making it difficult for consumers to land one at their doorstep. Moreover, the company is targeting a niche clientele as of now, as is evident from the price tags attached with the cars. They have tried to remedy the situation somehow by entering the preowned cars market, but there is still a long way to go. Be what it may, Tesla has shown that cars which will run on electricity can be made. The next step will be to make these affordable and for the masses.

It is easy to see that times are changing for the automotive industry. For all we know, the landscape of the automotive industry can change completely in the next few years. The big names of today can very well be out of business if they fail to adapt with the changing times. And with the advancement of connected cars, the way we interact with vehicles are also going to change. Will this change be beneficial for the industry? It is hard to predict it now, but one can be certain that a change is coming.

Author bio: Abhijit Dutta is a research and communication expert at a global research firm that conducts business research and provides market intelligent services. He helps firms gain actionable insights based on technology and best practices, thorough detailed market study and analysis.