Technology

Big Changes in the Auto Industry Are Coming

The question is whether Detroit will fully comprehend this.

Today there are nearly 30 major global automakers. Despite all of the buyouts and closures, a Morgan Stanley industry analyst is predicting that in the not too distant future a dramatic consolidation will happen. Adam Jonas claims "the world has too many car companies...and we believe the radically changing landscape of autos requires a commensurate change of thinking in Detroit if the domestic OEMs...are to remain relevant 15 or 20 years from now."

His bottom line point is that only about half dozen automakers will exist in the future. And the key catalyst of this changing landscape: Tesla. Because of the advancements in EV as well as several other technologies by Tesla, Jonas sees the next front will be the integration of technology being developed outside the car industry. Even GM has set up a committee to investigate how it can learn from Tesla’s operations. Basically, "Tesla could either end up being Detroit’s worst enemy or its salvation." Detroit, as well as all other global automakers, need to take in how Tesla has disrupted the industry and learn from it, or face extinction.

Another factor is self-driving cars, something which Jonas isn’t sure whether Detroit has fully understood the impact they’re going to have. However, if Detroit does things right and changes its mentality, it may end up thanking Tesla "for being that stiff board in the back of the head right when they needed it."

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