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Traditional Automakers Could Be Left Out in the Cold By the Rise of Electric and Autonomous Vehicles

Ride-sharing services could turn car manufacturing into a low-profit commodity business, says new study.

by on Jan.11, 2018

Waymo is already testing autonomous ride-sharing vehicles and will soon add fully driverless ones.

A century of growth seems likely to come to a screeching halt for the global auto industry, and that spells potentially serious trouble for major automakers, according to a new study – though the report also anticipates big opportunities for ride-sharing services.

It is widely expected that the auto industry will go through more radical changes in the coming decade or so than it has since Henry Ford fired up his first moving assembly line. Among other things, the report by the Boston Consulting Group, or BCG, anticipates that electrified vehicles will soon become commonplace, while millions of motorists in the U.S. and abroad will switch from owning a car to relying on ride-sharing services like Lyft and Uber.

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So, while global auto sales will continue to grow to around 108 million annually, “We will (then) reach a plateau around 2029 or 2030,” forecast Thomas Dauner, the head of the auto practice at BCG. “An industry that has been growing over the past century will stop.”


Car-Sharing Services Likely to Erode Auto Sales, Revenues

New study forecasts 35 million people will use car-sharing services.

by on Feb.23, 2016

A Smart car in Berlin, part of Daimler's car2go car-sharing service.

The auto industry could take a big hit to sales and revenues as car-sharing services take hold around the world, warns a new study.

As many as 35 million people will use car-sharing services each month by the beginning of the next decade, forecasts the Boston Consulting Group. That will reduce global car sales by at least 550,000 vehicles by 2021, automakers taking a revenue hit of 7.4 billion euros, or $8.14 billion at the current exchange rate.

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But the situation could get even more challenging later in the coming decade. As self-driving cars start to come to market in large numbers. “Autonomous vehicles will have a much greater impact on new-car sales than car-sharing will,” the study concludes.


Mandating New Safety Technology Could Save $900 Bil

Active safety innovations could save 33,000 lives annually, report claims.

by on Sep.30, 2015

A full conversion to autonomous driving technology could eliminate 90% of traffic fatalities, according to a new report.

New active safety technologies could reduce road accidents in the United States by more than one third, saving thousands of lives and billions in societal costs for medical care, vehicle repairs and lost productivity, according to a new study released this week by the Boston Consulting Group.

The study said available systems like automatic braking and lane control assistance technology could reduce the number of accidents by 28%. In addition, wider use of the new technologies could pave the way for fully autonomous vehicles and lead to a 90% reduction in fatal accidents over time.

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“Because the vast majority of crashes in the United States are caused by driver error, the lack of adoption of these technologies within the vehicle fleet in the United States is a significant missed opportunity,” said BCG’s Xavier Mosquet, who co-authored the report funded by the Motor & Equipment Manufacturers Association. (more…)

SAE Panel Lays Out Framework for Arrival of Autonomous Vehicles

Executives cite connectivity, more players as key to growth.

by on Apr.23, 2015

Tesla's Model S will be one of the first examples of vehicles using autonomous vehicle technology on the road this summer.

Pandora’s Box is now officially open.

The emergence of self-driving vehicles as a major force in the automotive industry was underscored this week during the Society of Automotive Engineers conference in Detroit, where the topic of self-driving easily eclipsed fuel-efficiency as the major topic of discussion.

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Seval Oz, chief executive officer of Intelligent Transportation Systems at Continental AG, said two of the factors that are driving the autonomous car revolution are exponential growth of wireless connectivity in cars and the demand by other companies for the attention of drivers and passengers, who spend upwards of two hours in a vehicle during the daily commute. (more…)

American Motorists Ready for Autonomous Vehicles – and Willing to Pay for Them

Technology likely to debut by 2017, market could reach $42 Bil annually, says new study.

by on Jan.09, 2015

Google's self-driving car took another step toward reality as the company used prototypes to give a focus group a few test drives.

Without a single model yet on the road, American motorists are anxiously awaiting the arrival of the first autonomous vehicles – and are willing to pay a significant premium for technology that could make the highways safer while boosting fuel economy, as well, says a new study.

More than half of all U.S. motorists show high interest in buying either a partially or fully autonomous vehicle, according to research by the Boston Consulting Group, and some would be willing to pay as much as a $5,000 premium.

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The study forecasts the first semi-autonomous vehicles will reach market by 2016, with fully autonomous models due by 2025, by which point BCG predicts the market for the technology will be worth $42 billion annually. (more…)

China’s Lack of Brand Loyalty Helping German Automakers

Study shows buyers looking to upgrade plan to buy German cars.

by on Sep.18, 2014

Buyers in China looking for a luxury brand lean toward German makers, such as BMW.

Chinese consumers are proving as fickle as their counterparts in the United States, according to a new study by the Boston Consulting Group, and that may be good news for German car brands there.

Roughly 40% of the owners of cars from Chinese makers planning to trade their vehicle for a global or “foreign” brand said they intend to buy a Volkswagen model. Nearly 90% of foreign volume-brand owners who are trading up said they are likely to buy an Audi, BMW or Mercedes-Benz, according to the group, known as BCG.

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China remains the world’s largest automobile market with sales expected to top 21 million units this year, dwarfing sales in the U.S., Western Europe and Japan, the industry’s traditional key markets. (more…)

Auto Industry Outperforms Other Industries in Comeback

Sector provided higher median returns since 2008.

by on Aug.26, 2014

Strong auto sales have helped automakers and suppliers provide better than average shareholder returns since the financial downturn of 2008.

Few economic sectors have mounted a more impressive comeback from the financial crisis in 2008 than the auto industry, according to a new study by the Boston Consulting Group (BCG).

The study found that auto manufacturers and component makers delivered five-year median annual returns that were well in excess of the 21% median return for the 26 industries tracked by the group.

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On average, carmakers produced a median annual total shareholder return, which traces both dividends and share price appreciation, of 29% from 2009 through 2013, while component makers posted a median annual TSR of 33%. (more…)

“Last Frontiers” Poised to Make up 20 Percent of Global Auto Sales by 2020

Developing Countries Key to Long-Term Sales for Automakers.

by on Oct.23, 2013

If Toyota wants to remain the top automaker worldwide, it needs to focus on growing sales in developing markets.

The auto industry’s “Last Frontiers” around the globe are in four regions spread across South America, Africa and Asia where car sales will grow faster than in China between now and the end of the decade, according to a new study by the Boston Consulting Group (BCG).

Car sales are set to explode in the Andes Region, North Africa, the Middle East – where Iran and Saudi Arabia are poised to become substantial markets – and in Southeast Asia where Indonesia vehicle sales are growing.

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All four regions have been scared over the years by terrorism, cycle of economic boom and bust and acute poverty. Nonetheless, the economies in all four regions are expected to grow at a pace that will sustain rapid growth in car sales, noted Xavier Mosquet, senior partner in charge of BCG’s Detroit office. (more…)

Gasoline Engine Isn’t Going Away Soon, Cautions New Study

Battery power likely to gain ground faster in China, Europe.

by on Jun.14, 2011

Battery-powered vehicles, like the new Ford C-Max, won't easily overtake the gasoline-powered automobile, cautions a new study.

“The reports of my demise have been greatly exaggerated,” Mark Twain reportedly once said, and the same appears to hold true for the internal combustion, it appears.

A new study suggests that gasoline power is likely to have more staying power than many might have anticipated due to a stream of technological advances reducing emissions and increasing fuel efficiency.  And that is likely to mean much lower acceptance for alternative powertrain technologies, such as plug-in hybrids and battery-electric vehicles, or BEVs, cautions the Boston Consulting Group.

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Demand for electrified vehicles will likely grow in China and Europe faster than in the U.S., reflecting strong government support for advanced technologies, the BCG report indicates.

“Electric cars will undoubtedly play an increasingly large role in many countries’ plans as energy independence and environmental concerns intensify,” said Xavier Mosquet, global leader of the consulting firm’s automotive practice. “But they will gain only modest ground up to 2020.”


“Breakthrough” Needed for Battery Cars

Study finds electric vehicles likely to remain niche through at least 2020.

by on Jan.07, 2010

The cost of the batteries in this prototype Volvo C30 would have to plunge from $20,000 to barely $5,000 to make the battery-electric vehicle competitive, warns a new study.

Without a battery breakthrough, electric vehicles are likely to remain little more than a niche segment in the global automotive market, according to a new study that also sees little likelihood this can happen during the coming decade.

Battery costs are coming down, according to a study by the Boston Consulting Group, but not nearly fast enough to make electric vehicles and plug-ins competitive with the time-tested internal combustion engine, or ICE, the report found.

“We need to have breakthroughs in fundamental battery chemistry,” declared Xavier Mosquet, leader of Boston Consulting’s automotive practice, during an appearance at the Automotive Press Association, on Thursday.

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That’s not to say batteries aren’t improving.  They’re getting smaller, lighter and more powerful.  And BCG’s study predicts that the cost of a typical lithium-ion battery will drop from more than $1,000 a kilowatt-hour today to somewhere around $400 by 2020.  But Mosquet stressed that to be competitive, prices need to fall even further, to “somewhere in the $200 to $250 range” per kWh.