Those of us who are of a certain age can remember how it felt to finally pass the test and then to hit the road – no matter how clapped-out the car was. Mobility and the sense of freedom have lost none of their appeal. But the journey's as important as where you're going – and now this is changing. Millennials are gradually losing their interest in getting a driving licence and owning a car, together with the prestige that goes with it – and an entire industry is having to transform itself simply in order to survive.
THE DRIVING FORCE BEHIND THE ECONOMY IS RUNNING OUT OF STEAM
So what's the car industry doing about it? The car expert Ferdinand Dudenhöffer doesn't have any good news. He thinks the industry is facing a serious crisis throughout the world. According to a current study by the CAR research institute at the University of Duisburg-Essen, global new car sales could fall by at least 5 percent this year to a figure of 79.5 million. Such dramatic declines were not seen even during the 2008 financial crisis.
Of course factors such as the trade war, Brexit and the stagnating Chinese market go a long way towards explaining the downward trend. However the problems, especially those facing German car makers, are of the industry's own making and have been in the offing for some time. For instance, the complacently successful German car industry was almost arrogant in its misjudging of the prospects of electric vehicles, and so it effectively "shot itself in the foot" or had its own "Kodak moment".
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TESLA IS CHURNING OUT 7,000 ELECTRIC CARS A WEEK - BUT THE FIGURE FOR BMW IS JUST 900
The industry is at least five years behind the curve of this radical change. Just to provide a comparison: in 2018 Elon Musk, the owner of Tesla who is often derided by his competitors, produced 7,000 electric cars a week, whilst the figure for BMW was just 900.
Coming on top of "diesel gate" when companies like VW and Daimler saw heaps of money as well as their own credibility go up in smoke, climate-protection regulations are hitting the outdated combustion engine hard. According to the current European Union climate-change target by 2030 the car industry will have to make a further 35% cut in CO2 compared to 2021. So 90% of cars that are built to today's standards will no longer have any chance of being sold.
"In future a networked car will probably generate more turnover than ten traditional cars that are not networked."
(D. Becker, Global Chair of Automotive, KPMG)
Now no more added value can be generated by conventional cars. But a new, highly promising market is opening up in relation to future mobility solutions: sensor technology for autonomous driving, battery technology for e-mobility, data processing systems, IT security, and even services such as insurance are experiencing rapid growth. Car sharing and the increasing networking of various mobility concepts have the potential to do away with the production of 23 million private cars by 2035. All these changes are mercilessly reflected in the share performance of the key players. For instance, the Israeli sensor manufacturer "Mobileye" which supplies key components for autonomous driving has been taken over by Intel in a deal worth about 15 billion USD. By comparison: when Nissan took a stake in Mitsubishi in 2016 the latter was valued at just 5 billion USD. New Economy beats Old Economy.
Car manufacturers know where things are heading – and it's going to be a low-emissions future. Major investments are being made, and even former arch rivals are cooperating in order to tap into new growth areas. Only time will tell whether this is enough to get on the fast track to new mobility. Because companies like Tesla, Apple, Google and Uber are already there.