Technology putting tremendous pressure on automakers, says new report image

According to the latest study coming from New York-based consultancy firm AlixPartners, automakers should be prepared for the strains brought by increased technological demand on the consumer’s part.

Futurists, when asked about the upcoming cars on the world’s roads in, let’s say 2050, will most likely tell you that people will ride in autonomous pods that are connected to the Internet of Things in the cloud and the vehicles get shared by numerous passengers each day. And getting to that envisioned future will be a major financial challenge for the global carmakers, pressured to squeeze their profit margins even further as technology demands soar and worldwide new vehicle sales are expected to slowdown in markets such as the US and China. In the report, AlixPartners also used a new acronym – CASE, short for “connected, autonomous, shared and electric”. It refers to the technologies and business models car manufacturers might be forced to adopt and adapt to in order to stay relevant in the industry.

AlixPartners, a mergers-and-acquisitions specialist that is best known for helping General Motors restructure after its 2009 bankruptcy process, says today just a handful of the automakers are big enough to handle all four issues. The analysis might be great news for merger aficionado Fiat Chrysler Automobiles chief executive officer Sergio Mrchionne, which has been aggressively preaching the auto industry’s consolidation. But the report also says mergers are not that necessary – proposing that automakers develop certain technologies in house and then partner with rivals or technology companies for the others.

Via Automotive News