The automotive industry is currently undergoing the greatest transformation in its 100-year-plus history. Customer demand and regulatory pressure mean the number of electric vehicles made, including hybrid models, is expected to increase by 466% by 2027, and cars will become increasingly autonomous and offer more connectivity. The setback to car-sharing and ride-hailing services caused by COVID-19 will be temporary, and we expect shared vehicles to account for around one-third of the market in Europe by 2030 and a greater proportion in the US and China.
At the same time, profitability is being squeezed: Investments in electric and autonomous cars need to be made, yet sales at the world’s biggest carmakers are expected to fall by between 13% and 24% in 2020 as a result of the pandemic and ensuing economic shock. To keep pace with all these changes, automakers (OEMs) and their suppliers must invest to transform the way they make vehicles. In our 2018 analysis of the market we identified two distinct production models that will be required: First, highly automated “plug and play” plants producing almost identical mass-market vehicles, predominantly for car-sharing services; and second, the “flex champion” – technologically-advanced flexible plants producing high-end, driver-owned customized vehicles.
In this study, we will focus on the “flex champion” because the need for greater flexibility has accelerated. There is growing demand for a range of engine technologies, for new models to be available faster, and for customized models to be delivered more quickly. There is also supply-chain uncertainty due to trade tensions and the disruption caused by COVID-19 lockdowns. Both highlight the need to be able to respond quickly to unforeseen shocks. Our key findings are:
This report was prepared in cooperation with Fraunhofer IOSB.