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Automotive market consolidation: what will emerge by 2020

Automotive market consolidation: what will emerge by 2020

Thursday, February 23, 2017

[EXTRACT FROM "Corporate Mobility Breakthrough 2020"]*

Despite being among the leaders in self-driving technology, Daimler has admitted that Apple and Google will become formidable competitors. Uber and Tesla have the incumbent industry on the ropes. Carsharing and mobility systems make owning a car almost superfluous.

When the automobile first came to market there were over 400 brands within the first 10-20 years. Ten years after, a wave of consolidation and acquisitions slimmed this down to a hundred. The enormous growth and energy seen in the current market, with Silicon Valley being thrown into that mix, is akin to those first years of the automobile.

We are now at the same stage and, at the moment, some automakers can still play the goliath to many of the upstarts. GM purchased Cruise Automation in 2016 for $1 billion and invested in Lyft. The tables may yet turn, however. Considering the market value and cash reserves of Apple, Google, Uber and even Amazon, it’s not unrealistic to believe that existing manufacturers themselves could be bought up by the players they perceive as Davids. FiatChrysler is small enough to be purchased outright by most industry players – a fact not lost on its CEO, Sergio Marchionni. After unsuccessfully offering up his company to GM and Ford, he has pragmatically accepted Fiat’s fate as a contract manufacturer, publicly offering to build either the Google car or Apple’s iCar.

It is firms that can adapt and change their models to a ‘zero ownership’ market that will survive.

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Source: Corporate Mobility Breakthrough 2020 by Lukas Neckermann with Tim Smedley  - p.95 – 2016

*The author, Lukas Neckermann is a thought-leader with whom the Corporate Vehicle Observatory shares the same interest in the future evolution of the company car and corporate mobility in general.

The Corporate Vehicle Observatory is a neutral knowledge sharing platform dedicated to all corporate fleet stakeholders whether they are private or public companies, fleet owners, fleet lessors, car manufacturers or media. The CVO was founded in 2002 by BNP Paribas and its subsidiary Arval, specialized in the full service leasing of corporate fleets.