Automobiles are self-propelled vehicles used for travel on land. They include cars, trucks, buses and motorcycles. These vehicles are made from different materials and are designed for various purposes, ranging from passenger transport to industrial use.
The automotive industry is a large and growing sector of the global economy. It is estimated to have revenues of $1.5 trillion in 2019.
The automobile revolutionized the way people lived and worked, with people having more freedom and time to do what they want. It also opened up the world to new forms of recreation, including sports and tourism.
In the United States, cars were first sold in mass production by Henry Ford in 1908. His invention of the assembly line and his Model T made it possible for him to make inexpensive vehicles that could be easily marketed. The Model T became one of the most popular vehicles in history, selling millions of units during its short lifespan.
This innovation led to the formation of the modern auto industry in the United States. The vast geographical area of the country, together with a higher per capita income and more equitable distribution of income than Europe, ensured strong demand. The absence of tariff barriers between the states also encouraged sales over a wide geographic area.
By the late 1920s, Henry Ford and General Motors were able to monopolize the domestic automobile market. The two companies produced about 80 percent of the U.S. car market and dominated the industry, until World War II, when they shifted their attention to producing military vehicles and war materiel.
During World War II, American manufacturers produced one-fifth of all war production, most of which were vehicles and other military equipment. In addition to automobiles, they manufactured such essentials as airplane engines and aircraft fuels, ammunition, munitions and war materials for the Navy.
Today, many new business models are emerging in the automotive and mobility industries. These business models will inevitably affect traditional players’ competitive landscapes.
The four major trends that will drive the future of the automotive industry are:
1. Change in the nature of the product, especially influenced by shared mobility services and connectivity.
2. Restructuring of the industry, driven by changing business models and competition from mobility providers (Uber, Lyft, etc.) and specialty OEMs (Tesla, Apple, Google, etc.).
3. Technological developments that will reshape the industry and impact consumer behavior, with a focus on reducing costs, enhancing fuel efficiency, lowering emissions and becoming more capital-efficient.
4. The shift to more mobility-as-a-service (MaaS) models.
5. Shared transportation, mobility as a service and connectivity will create a highly competitive automotive market.
6. The changing nature of the automotive market, particularly influenced by changes in consumer behavior and competition from new business models will lead to restructuring of the industry, with traditional players being squeezed between their core automotive products and a host of new automotive-related businesses.
7. The transition to more mobility-as-a-service models will increase the commodification of vehicle-related components and services.