How Will the Automotive Industry Change in the Future?

The automotive industry faces a wide range of changes. While the past decades have seen companies master various challenges, the upcoming changes are much more significant, and the stakes are much higher. In this environment, companies that can grasp these realities and position themselves innovatively will be in a solid position to thrive in the future market.


In today’s rapidly evolving world, the automotive industry must be highly adaptable to stay ahead of competitors. Changing consumer demands, new technologies, and regulatory demands contribute to increased industry uncertainty. As a result, organizations must develop new ways to manage and adapt to change. A fundamental way to improve adaptability is integrating data across different business lines.

Adaptive companies create environments that enable them to grow and change without creating inflexible organizational structures. The goal is to create a culture of trust between all participants and minimize barriers. For example, the Toyota automotive supply pyramid was an early example of an adaptive system. Another example of an adaptive ecosystem is eBay. Seller ratings and online payment systems support its complex network of sellers. A similar approach was used to bring down Nokia.


With the advent of 5G technology, connected cars can communicate with each other on a much larger scale. This will allow manufacturers to provide remote diagnostics, predictive maintenance, and online scheduling services. However, this will not be possible without a comprehensive infrastructure of connectivity.

Automotive technology has evolved with the consumer’s demands, and more software has been integrated into the design process. Connectivity systems in motor vehicles will allow manufacturers to produce better cars in a faster timeframe. In addition, these systems could allow manufacturers to upgrade fleets systematically.

Modular Design

Modular design is a concept that many automotive companies have used. This method enables OEMs to react quickly to changing customer demands. However, a well-designed modular design is not suitable for solving every problem that a vehicle may have. It is still early to tell if this method will succeed in the automotive industry.

With the growing popularity of modular design, automakers can build a broader range of variants from a single platform, reducing overcapacity and increasing flexibility. For example, infotainment systems could use a standard operating system, displays, and input devices. Automakers might also be able to develop additional safety functions with modular systems, including brakes, steering, and crash protection.

Electric Motors

Electric motors are rapidly becoming a standard feature in new cars. The new technologies allow automakers to make cars with ranges of over 350 miles without the need for combustion engines. At the same time, they are also becoming more affordable. This is leading to a massive increase in demand for EVs. As a result, many automakers are preparing for a rapid transition to EV production. According to news sources Currently, nearly five million electric vehicles are on the road worldwide, but analysts project this number will increase exponentially in the coming years. By 2030, up to 150 million EVs will be on the road.

While electric vehicles have many advantages, they will also cause several challenges for automakers. First, they will pose new challenges regarding light weighting and safety. However, they will also have significant environmental benefits. Second, manufacturers will be faced with a new supply chain of batteries. Because of this, some of them will need to retrain their workers.

Shared Mobility Solutions

Shared mobility solutions are changing the way people travel. These alternatives to owning cars are more affordable and faster. The rise of MaaS is driven by social phenomena such as urbanization, population growth, and environmental concerns. These trends are driving the need for new mobility forms. As a result, fossil fuel-powered mobility is being replaced by consumer-centric electric mobility. Shared mobility is already changing transportation patterns, including transportation services such as e-hailing, ridesharing, and carpooling.

Mobility providers and OEMs are working together to provide shared mobility solutions. These companies will likely provide vehicles for commuters on a subscription basis. These services may include insurance, maintenance, and finance. These companies will also provide a platform that commuters can use to access and pay for a vehicle.

Cost of Manufacturing

The costs involved in building cars vary widely from manufacturer to manufacturer. The cost of the materials used, components used, and labour hours vary. Large cars cost more to manufacture while small cars cost less. Research and development costs also play a significant role in manufacturing costs. A car’s research and development costs are around 10% of the total cost.

Manufacturing a new model requires extensive research and development, including creating prototypes, hiring staff, finding suppliers, and paying salaries. Once the prototype has been created, it must be tested before it is sent into production. This process is time-consuming and requires considerable investment. Additionally, retooling factories and retraining workers increase costs.

Growth Rate of Global Car Sales

The world car market is continuing to grow at a slower pace. In the decade to 2030, the global car sales growth rate is projected to fall to two per cent annually. This decline is driven by macroeconomic factors and the emergence of new mobility services. However, the industry is not doomed.

According to the latest statistics from the International Organization of Motor Vehicle Manufacturers, passenger car production is falling in all manufacturing regions, with the most significant declines in Western Europe and Latin America. Commercial vehicle sales decreased by 8%, while passenger car sales dropped by more than 20% in some regions. The NAFTA region and Latin America saw their annual passenger car sales decline by 28.9%, while Western Europe’s auto sales declined by 21.8%.

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