The Future of the Automotive Industry 2015
At the Rotterdam School of Management MBA students Joost Hermans, Per Jensen, Sjoerd Van Rossem and Hans Stigter have as part of their assignment for the course New Global Business Environment looked at the future of Automotive Industry in 2015. To download their full report in PDF please click here.
Introduction
Mitsubishi is one of the few global auto manufacturers. A position that has been achieved through continues improvements. These improvements have focussed on the in-house manufacturing activities and technological expertise.
From the research and expert interviews, the key uncertainties were defines as energy and modularisation. Especially for energy, a long discussion followed on definition and source, until agreement was reached to focus on the cost of the energy. This would both capture the definition and source..
Scenarios
Shifting Gear
The global awareness of the environmental situation and the search for better and more efficient technologies stimulate the developments in technology and research. New developments are:
- Automated Transport Systems. This is a system that drive vehicles automatically, in a energy optimal way. At the same time these systems take the biggest single reason for accidents out of the equation – the human driver.
- Improvement of existing propulsion systems, and development of alternatives
Ultimate Freedom
More and more often people sell their houses and choose to live in mobile homes. This leads to the collapse of the market for regular cars (except for cars like the Smart that can be put into the trailer for short trips) and the housing market. All car manufacturers and real estate construction companies are scrambling to enter the customised mobile home market. Companies that build trucks and busses have a competitive advantage.
Boom and Bust
The commodity product has made public transport development impossible, because a cost benefit comparison is won by the commodity car being the second or primary car in the household. The increase in demand for the commodity product leads to increases of pollution and congestions.
The government has not taken an interest in the industry so far, but the congestion and increased pollution drives the government to anti-car related legal taxation. Taxation on car usages, making city centre pedestrian zones, and levying tax on driving into the city are some of these steps taken by the government in 2012 to make car driving less popular. The automotive industry collapses since the demand for the car diminishes overnight.
New Generation
In 2009, the ATS allows the driver to do something else then drive. The ATS system can take over driving and after some customer acceptance issues, the car can be used for other purposes. In the business sector, a car is being offered to function as an office with all facilities available. Individual driving and freedom prevails.
The customisation goes extreme in the sense that there are no longer standard vehicles. All the cars are made to measure, I.e. Morgan 8, and build to order. This change transforms the automotive industry, since no longer stock and large facilities needs to be maintained for the distribution chain. The vehicle manufacturer is required to have very flexible manufacturing facilities and JIT suppliers to survive.