Can it adapt to changing demands?
For decades, automakers sold their products in the United States and other large markets by featuring attractive styling, powerful engines and vehicles that created an aura of status and affluence. Today, the industry is caught up in what General Motors executive Mark Reuss calls the biggest transformation since its creation more than a century ago. Driving the shifts are technology such as artificial intelligence and electric vehicles, as well as changing consumer preferences that create demand for ridesharing services and lessen vehicle sales. The biggest potential change of all may be the advent of autonomous vehicles, although this could be slowed by the recent fatal collision between a pedestrian and a self-driving car in Tempe, Ariz. Amid the industry’s innovations, traditional auto companies are hurrying to form partnerships with software developers and other high-tech enterprises.
Among the key takeaways:
Chinese automakers are pushing to penetrate the U.S. market and are focusing on production of electric vehicles and the batteries they require.
U.S. vehicle sales declined in 2017 after seven consecutive years of growth, and forecasters predict another dip in 2018.
Millennials, especially in urban areas, are powering many of the changes buffeting the auto industry, such as the demand for ridesharing services and electric cars.
Resources for Further Study
Halberstam, David, “The Reckoning,” Open Road Media, 2012. In this classic work first published in 1986, a Pulitzer Prize-winning author describes how the U.S. auto industry fell behind its Japanese competitors in the decades after World War II.
Ingrassia, Paul, “Crash Course: The American Automobile Industry’s Road from Glory to Disaster,” Random House, 2010. Drawing on extensive interviews with workers and executives, a former Detroit bureau chief for The Wall Street Journal recounts the mistakes that led to General Motors and Chrysler seeking bankruptcy reorganization in 2008.
Lipson, Hod, and Melba Kurman, “Driverless: Intelligent Cars and the Road Ahead,” MIT Press, 2016. An engineering professor (Lipson) and a technology analyst (Kurman) look into the coming of intelligent cars and how they will change society.
Wedeniwski, Sebastian, and Stephen Perun, “My Cognitive autoMOBILE Life: Digital Divorce from a Cognitive Personal Assistant,” Springer, 2017. Two technologists describe how smartphones, virtual assistants and automobiles will join with artificial intelligence to create a highly personalized smart vehicle.
“Redesigning the industry: How will it all shake out?” Automotive News, Nov. 4-Dec. 11, 2017, http://tinyurl.com/
Boudette, Neal E., “Car Sales End a 7-Year Upswing, With More Challenges Ahead,” The New York Times Jan. 3, 2018, https://tinyurl.com/
Holley, Peter, “After crash, injured motorcyclist accuses robot-driven vehicle of ‘negligent driving,’” The Washington Post, Jan. 25, 2018, https://tinyurl.com/
Hough, Jack, “GM Gets Back in the Fast Lane,” Barron’s, Feb. 3, 2018, https://tinyurl.com/
Mervis, Jeffrey, “Are we going too fast on driverless cars?” Science magazine, Dec. 14, 2017, https://tinyurl.com/
Shankleman, Jess, and Hayley Warren, “How Electric Cars Can Create the Biggest Disruption Since the iPhone,” Bloomberg News, Sept. 21, 2017, https://tinyurl.com/
Vonberg, Judith, and Nadine Schmidt, “‘We can’t just stop breathing’: A global scandal, made in Germany,” CNN, Feb. 22, 2018, https://tinyurl.com/
Reports and Studies
“The Contribution of the Automobile Industry to Technology and Value Creation,” A.T. Kearney, 2013, https://tinyurl.com/
“Global Automotive Executive Survey 2017,” KPMG, 2017, https://tinyurl.com/
Ferraris, Vittoria, Nishit Madlani and Alex Herbert, “Industry Top Trends 2018: Autos,” Standard & Poor’s, Nov. 15, 2017, https://tinyurl.com/
Gao, Paul, et al., “Disruptive trends that will transform the auto industry,” McKinsey & Co., January 2016, http://tinyurl.com/
The Next Step
Ell, Kellie, “Driverless cars aren’t safe or ready for the road: Robotics expert,” CNBC, March. 20, 2018, https://tinyurl.com/
Hawkins, Andrew J., “The fate of the steering wheel hangs in the balance,” The Verge, March 16, 2018, https://tinyurl.com/
Wakabayashi, Daisuke, “California Scraps Safety Driver Rules for Self-Driving Cars,” The New York Times, Feb. 26, 2018, https://tinyurl.com/
Cropley, Steve, “‘Diesel-saving’ technology could make it to market in two years,” Autocar, March 22, 2018, http://tinyurl.com/
Oge, Margo, “Commentary: How Monkeys Proved to VW That Diesel Can Never Be Safe,” Fortune, March 6, 2018, https://tinyurl.com/
Topham, Gwyn, “The death of diesel: can struggling industry woo back consumers?” The Guardian, March 4, 2018, https://tinyurl.com/
Alliance of Automobile Manufacturers
803 7th St., N.W., Suite 300, Washington, DC 20001
Industry group that seeks policy solutions on behalf of major U.S., European and Japanese automakers.
American Automobile Association (AAA)
1000 AAA Drive, Heathrow, FL 32746
Founded in 1902, this club for car owners and passengers provides roadside assistance, travel information and discounts to members. It also lobbies on behalf of drivers and passenger safety.
Center for Auto Safety
1825 Connecticut Ave., N.W., Suite 330, Washington, DC 20009
Nonprofit founded in 1970 to advocate for auto safety, quality and better fuel economy. Publishes reports and takes complaints about problem cars.
European Automobile Manufacturers Association
Avenue des Nerviens 85, 1040 Brussels, Belgium
+32 (0) 2 732 55 50
Advocacy group that represents car, truck, van and bus makers in Europe and seeks to “ensure the economic, environmental and social sustainability” of the industry.
Fédération Internationale des Sociétés d’Ingénieurs des Techniques de l’Automobile
29, M11 Business Link, Stansted, CM24 8GF UK
+44 (0) 1279 883 470
Umbrella group representing 38 member auto engineering societies; organizes the biennial World Automotive Congress.
National Highway Traffic Safety Administration (NHTSA)
1200 New Jersey Ave., S.E., West Building, Washington, DC 20590
U.S. agency that oversees auto safety, recalls, data collection on crashes and more.
Society of Automotive Analysts
1729 Southfield Road, Birmingham, MI 48009
Trade group that provides information, insights and access to industry leaders and data, and hosts an annual industry outlook conference.
Society of Automotive Engineers
400 Commonwealth Drive, Warrendale, PA 15096
Trade group representing engineers in automotive, mobility, aerospace and other fields.