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LATEST THINKING


Autonomous driving

Are OEMs losing the driver seat?

OVERVIEW

Autonomous driving is becoming the hot topic of discussion in the automotive industry. Premium car-makers such as Audi, BMW and Daimler have showcased their know-how by trialing their prototypes on test courses and selected routes. Tesla has announced that their Model S customers will have the option of being driven by their car within the next three years. Simultaneously, new competitors are entering the market: Google has tested its first driverless automobile on public streets and Apple considers the car to be the “ultimate mobile device”.



BACKGROUND

Currently, premium vehicles have already reached Level 2 automated functionality with, for example, the simultaneous operation of adaptive cruise control and lane assistance. Industry forecasts expect OEMs to be expanding their advanced driver assistance systems further. They estimate that the OEMs are also likely to begin small-scale deployment of Level 3 partially autonomous cars (automated vehicles with limited driver intervention) within the 2020 timeframe. OEM sales of Level 4 fully autonomous cars will start slowly in 2020 but are predicted to experience rapid growth with the beginning of volume deployment in 2025.

ANALYTICS

Even though the market potential is substantial, on a business level this new technology involves three key challenges for OEMs:

  • First, driverless cars attract new non-automotive competitors blurring industry boundaries.

  • Secondly, new customer offerings emerge as customers increasingly wish to consume services beyond simply moving from A to B.

  • Thirdly, further digitalization forces a shift in emphasis across the value chain

SUGGESTION

Autonomous driving offers significant market potentials which can be addressed by different business models. OEMs need to ask the right questions now. The answers to them are key in determining the companies’ value share in the autonomous driving challenge in the long run.

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