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Autonomous Driving: A Report By Roland Berger
According to a recent study conducted by Ronald Berger, a global consultancy about Autonomous driving, Automatic driving has the potential to fundamentally transform the automotive industry in the coming years - be it through innovative software technologies and vehicle models or new ways of using cars, such as "mobility on demand".The expectation is that cars will be able to drive completely autonomously from 2030 onward,without the driver taking an active role. The market potential for the automotive industry is huge.
In their new study"Autonomous driving", the Roland Berger experts expect sales of components like cameras, sensors and communication systems to add some 30 to 40 billion dollars to the size of the global market. Further revenues worth 10 to 20 billion dollars could then be generated from the sale of advanced software and related services.
"Automatic driving will initially become established in a gradual process, but after 2030 it will bring a real revolution to the auto industry,"explain Wolfgang Bernhart and Marc Winterhoff, Senior Partners at Roland Berger Strategy Consultants. "So OEMs and suppliers should already be thinking about the role they want to occupy in this market of the future, and design their business model around that."
New
software
solutions
demand
considerable
investments
Distance
sensors,
parking
assistance
or
cruise
controlsystems
are
already
taking
much
of
the
burden
off
drivers
and
are
supplied
as
standard,
at
least
in
the
premiumsegment.An
unstoppable
trend:the
first
highly
automatedvehicles
are
expected
to
be
driving
on
the
highwayby
2020,in
the
city
by
2025,
and
"door
to
door" without
a
driver
by
2030.
Though many of the technical requirements have already been met, automakers still have certain barriers to overcome.Automated vehicles of course need the right sensors, cameras and radar systems. Such components are manufactured by large suppliers or the OEMs themselves. But it's a much more complex task to develop new software solutions for completely self-driving vehicles. These are algorithms, for example, that detect what other road users are doing. The car is therefore for example able to decide autonomously whether it should brake or accelerate.
"In this complex field, both the OEMs and the suppliers are entering unknown territory," explains Wolfgang Bernhart. "So they need to decide whether they can develop the software themselves or whether they need to cooperate with or acquire technology corporations that possess the respective skills." Only if automotive companies stay in the driver's seat will they be able to maintain their share of the global mobility profit pool.
"However, developing these systems is going to necessitate particularly large investments as well as expertise from the field of machine learning, an artificial intelligence specialty that the Internet giants in particular are increasingly focusing on," says Bernhart.
A
variety
of
business
models
for
suppliers
The
functions
of
assistance
systems
are
currently
mostly
separated,
and
highly
automated
vehicles
have
them
combined
in
a
central
computer.But
this
new
electronic
architecture
is
displacing
the
volumes
previously
shipped
by
individual
suppliers;
so
they
need
to
determine
as
soon
as
possible
the
right
business
model
for
them
in
this
market.
The
Roland
Berger
experts
have
identified
various
possibilities
depending
on
the
size
and
specialization
of
the
company
concerned:
Big system suppliers:They should either develop their own software solutions or acquire the necessary expertise through targeted corporate acquisitions.The sizeable investment requirements in this segment will cause the market to consolidate, though, leaving only three to four large suppliers who can break into the global market.
Small suppliers that are already developing assistance systems:As assistance functions grow increasingly centralized, suppliers are compelled to refocus- for instance on low-cost assistance systems for the growing emerging economies.
Suppliers with a focus on technological innovation:These suppliers should expand their technological leadership in areas such as cameras - toward image recognition solutions based on advanced artificial neural networks -so as to be able to supply OEMs globally with better functionality at lower costs.
Mobility
on
demand
is
transforming
business
models
"Another
trend
set
to
influence
the
automotive
market
strongly
is
the
mobility
on
demand
that
will
come
with
self-driving
systems",
says
Marc
Winterhoff.
It's
conceivable,
for
example,
that
fully
automated
taxis
rather
than
taxi
drivers
will
be
picking
up
passengers
in
the
future;
rental
cars
could
drive
to
their
customers
direct
and
wouldn't
need
to
be
collected.
This
new
type
of
mobility
is
going
to
radically
change
not
only
the
functionality
but
also
the
design
of
the
vehicles
and
the
competitive
situation
among
auto
manufacturers
and
suppliers.
The
Roland
Berger
experts
believe
that
four
scenarios
are
possible:
Scenario one:Traditional automakers and suppliers work together to develop the crucial technology elements; OEMs offer proprietary mobility solutions. There is no great change in the traditional business models.
Scenario two:New providers of mobility solutions dominate this market. Some large automobile manufacturers and suppliers deliver the software solutions needed for the complex decision-making processes involved in automated driving. Economies of scale serve to improve the market position of these providers in the B-to-B sphere in particular-smaller suppliers are crowded out of the market.
Scenario three:Automakers dominate the market for mobility solutions and leave the big technology corporations to handle the specialized software development. As such, few software providers are able to set the market prices; OEM margins come increasingly under pressure and their competitive strength diminishes.
Scenario four:Suppliers of innovative mobility solutions determine the product spectrum;technology companies supply the corresponding software. OEMs' and suppliers' shares of the global mobility market profit pool shrink substantially.
"This scenario analysis highlights the opportunities and risks for the industry. Automobile manufacturers and suppliers should use scenarios and potential end games to consider in good time the role they want to play in this promising market - only with a suitable strategy and a well-chosen business model will they succeed in exploiting the exciting opportunities of automatic driving for their own benefit,"summarize Roland Berger Partners Wolfgang Bernhart and Marc Winterhoff.