•A dramatic shift of production and sales to the Asian markets will take place and China will account for about 30% of global sales in 2025
•Small and low cost cars will gain more importance
•Electric vehicles will account for about 10% of new vehicle sales by 2025, hybrids will reach a 40% share
•The connectivity of cars will be a key factor
•New business models will rise
•Successful organizations will undergo structural changes and open up to partnerships
Shanghai, March 24, 2011:Five megatrends, geopolitical change, changing demographics, sustainability, the evolution of mobility as well as changing technology, will cause a huge leap forward in the development of the automotive industry within the next 15 years. This will lead to ten key findings, published in the "Automotive landscape 2025" study conducted by Roland Berger Strategy Consultants. The consultants spoke to more than 60 leading experts from the automotive industry and other related organizations worldwide. Roland Berger conducted the interviews in partnership with Amrop, a leading executive search company.
"The industry's center of gravity will shift", says Wolfgang Bernhart, Partner at Roland Berger Strategy Consultants and co-author of the study: "Core technologies will change, new forms of organizational setup will emerge, employees will have to meet new requirements and new business models will develop."
Shift to Asia
A dramatic shift to the Asian markets will take place. Both production locations and sales will be affected, with a significant share of the customer base coming from Asia, requiring specific products suited to their needs.
Small and low cost cars
The demand in Asia supports low-cost cars as an important entry point as well as A/B segment cars in general. The small car segment will grow in mature markets, too, where values are changing.
At the same time cars will continue to lose their appeal for younger generations. "Starting in developed countries, there will be a radical change in values: For younger people cars will no longer be as much a status symbol as in the past”, states Philipp Grosse Kleimann, Partner at Roland Berger Strategy Consultants and co-author of the study.
Electric vehicles and connectivity
The cars in question will predominantly be electric, and one in two will have a fully or partially electrified powertrain. Electric vehicles will account for about 10% of new vehicle sales by 2025, hybrids will reach 40% share and internal combustion engines will still account for 50%. “The growing overall share of electric drivetrains will reshape the current mobility value chain for OEMs and suppliers, but also for utilities and third parties”, states Wolfgang Bernhart, Partner at Roland Berger.
According to the study many vehicles will be permanently online, sending and receiving information via the Internet. Connectivity will be the key. "As a result of this trend the automotive industry will converge with other industries and a cross-industry perspective will be mandatory for management," says automotive expert Grosse Kleimann.
New business models
With all these changes taking place in usage patterns and technology, new business models and value chain partners will emerge, challenging the status quo – especially where they come from sectors other than the automotive industry. "Automotive companies will engage in multiple partnerships as a way of accessing technology and customers and securing economies of scale", says Roland Berger Principal, Marcus Hoffmann, the third co-author of the study. These new business models will not just be about selling cars but about integrating software and hardware.
Changing organizations
Automotive companies will move away from centralized organizations in the pursuit of size and access to fresh sources of engineers and other specialists. Instead, they will begin to operate glo/cally, combining global reach with adaptation to local needs and regulations. Consolidation will continue among suppliers while new Original Equipment Manufacturers (OEMs) are likely to emerge from both inside and outside the industry.
China implications
"This global study has identified several important implications that are also very relevant to China, which is undoubtedly the most important growth market today and in the next 15 years," states John Shen, a Senior Partner at Roland Berger Strategy Consultants (Shanghai) and the head of the China Automotive Competence Center. "This study is also very timely in light of the recently published China's 12th 5-Year Plan, which has laid important guidelines that will drive China's auto industry development in the next 5 years and beyond. Our consultant team in China is assessing how findings from this study could be applied to China and conversely, how unique developments in China would impact the global auto industry."
