Doug Ross Discusses Future of the Automobile Industry

Out in the limelight, the future of the automotive industry is receiving plenty of press. With new technology coming into the market, including sensor technology, mixed reality and 3D printing, one can see why there is a substantial amount of column space devoted to covering this transformation.

Ride-sharing designs, electric vehicles and autonomous modes of transportation are also receiving public buzz, while consumer-focused business models are becoming increasingly influential.

Widespread digitalization is making traditional industries rethink their strategies, and, as companies like Uber, Google, and Apple claim their own shares of the market, it represents a changing of the guard in some way.

Now, the classic titans are having to adapt and, interestingly enough, evade their new competitors that are introducing bold ideas from various industries and supported by powerful partnerships.

Doug Ross, an automotive expert from Barrie, Ontario, who has spent the majority of his life working in the industry, details the factors that will dictate its future course.

Technological Transformation

Vehicle manufacturers have gotten by selling a product that has largely been unchanged since Ford brought us the then-revolutionary Model T in 1908, a day when the convenience and comfort of the modern car replaced domesticated animals as the primary source of transportation.

For a significant time, automotive manufacturers decided to keep the product as is because it has constantly been desirable, necessary, and the business models that were already established to support the industry left companies to solidify their own niche in the market.

However, as technology has inevitably advanced in other sectors, much of the economy has prioritized flexible, accessible, and innovative services, leaving previous generations of car manufacturers at a crossroads to recover their business profits that were once deemed to be automatic. To achieve this, new ideas are being examined to hopefully bring back those greener pastures of the past, as the industry seeks to develop ways that will attract an audience that calls for instant gratification, on-going services and extra personalization.

Automotive executives get excited about a precision-engineered component. This is understandable, says Doug Ross, as that is what they grew up admiring. Seeing a present-day situation where people are more likely to invest in a ride-service over those tried-and-true vehicles is quite the shocker for them.

Major automotive companies are striving to ensure that their traditional methods sustain the pressure, as the resulting cash flow will permit them to invest in newer areas they are exploring. After all, nobody ever knows for certain what will succeed.

Daimler and BMW, two companies attempting to fight off newer business models, are collaborating on self-driving luxury approaches. Time will only tell if it pays off, as technological prowess and a consumer-focused mentality from separate sectors are creating a genuine threat.

A Diverse Line-Up

While technology is definitely disrupting the automotive industry, the market size will be stretched due to newer business models and different technological ingeniousness entering the field, says Doug Ross.

This shift to a digitized and consumer-focused market; however, means that automotive companies are now sharing the market. Start-up companies, backed by major multinationals and their technological authority, are bringing new ideas inspired by various industries.

One example is the partnership between Siemens PLM Software and Hackrod, the latter of which is a start-up in California with ties to the entertainment industry, that looks to pursue the proposition that two people in their garage should be able to design their dream car in a non-opposing environment.

The team at Hackrod is bringing a fresh perspective that will engage the forthcoming generation of designers and thinkers, enabling them to identify how they would like such a project to work.

Hackrod’s Autonomo platform, powered by Siemens PLM’s Saas that carries experience in design software and solid-edge machinery, can take advantage of different technologies and combine them. Doug Ross states that a project of this magnitude will promote the democratization of new technologies, driving innovation in the automotive sector.

Going Electric

Electric cars (hybrid, plug-in, battery electric, and fuel cell) will gain momentum in the coming years, with stricter emission regulations, lower battery costs, a more accommodating charging infrastructure, and higher consumer acceptance all playing a role in this change in attitude.

How quickly this adoption process goes will be driven by the interaction between consumer demands that hinge on the total cost of ownership, and regulatory pressures. By 2030, electrified vehicles could account for 10 percent to 50 percent of new-vehicle sales.

It is believed that adoption rates will be most noticeable in developed cities with strict emission regulations and consumer incentives, such as tax breaks, special parking, driving privileges, and discounted electricity pricing. Smaller towns and rural areas with less of a charging infrastructure and more dependence on the overall driving range will naturally see slower sales of electric vehicles.

Steady improvements in battery technology and cost will shorten that gap, as electrified vehicles are predicted to earn more of a market share from conventional vehicles. Over the following decade, battery costs could be reduced to a range of $200 dollars to $150 dollars per kilowatt-hour, which will almost ensure that electrified vehicles receive cost competitiveness with standard vehicles.

Final Thoughts from Doug Ross

Global car sales will constantly grow, but the annual growth rate is believed to be heading for a bit of a drop from the 3.6 percent that has been achieved throughout the last five years. That figure is expected to be around 2 percent by 2030, largely because of macroeconomic factors and the upsurge of new mobility services (car sharing, e-hailing etc.).

Intriguing times are ahead for the automotive industry, says Doug Ross.

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Adrian Rubin

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