Metamorphosis of the automobile industry

The shape of the auto industry is set to metamorphose into something we possibly don’t fully comprehend just yet, and Siddharth is watching it all with bated breath.

The world is moving towards SUVs – we hear that refrain often enough these days. But we are also hearing about how the inevitable future lies in driverless electric cars. So do the two add up?

Well, of course, you can have electric SUVs that eventually become automated – isn’t it? Audi’s e-tron Quattro, with semi-autonomous driver aids, is a good example of that marriage perhaps – at least in the immediate context. Volvo has also stated its intention to electrify its new compact modular architecture platform cars, like the soon-to-launch XC40. And then there’s JLR, which has already showed us the Jaguar I-Pace concept that takes aim squarely at the Tesla Model X.

And it’s really all thanks to Tesla, in many ways, that we are even considering all of this in the first place. The rise of Tesla, and its cool factor, coupled with the diesel-gate debacle from the Volkswagen Group have ensured that the pace with which we accelerate to this all-electric future has quickened substantially.

Governments around the world are talking about a diesel-less and even a fuel-free future. The UK, India, and now even Germany are setting deadlines to move to an all-electric car environment. Don’t forget that it was Tesla that also popularised its autopilot or autonomous driving feature on the Model S. Now, on that front, governments will be more wary to jump towards any kind of standardisation of regulation.
 
So, back to my initial premise then – the electric, and possibly, semi-autonomous SUV (or let’s even say SUV-like vehicle). While VW, Toyota and even Renault-Nissan may seem to have the best grip on the need for such cars, and the deepest pockets, it would seem that the likes of Jaguar Land Rover or Volvo are actually better placed. Let me explain why I say this. These three brands are still relatively niche, and yet their parents have not stemmed the line of credit they each have towards their R&D spending.

In the case of Volvo, its parent Geely has other reasons to want to have access to such technology and capability. But what of Tata Motors? If its plan with new modular architecture vehicles, and dare I say TAMO, go through, then it too would benefit greatly from any breakthroughs made by JLR. But that may not be enough to sustain the big push or next leap that’s coming. And so like BMW and Toyota have joined hands, or Daimler and Renault-Nissan too, JLR (and therefore Tata in tow) also must seek out new partnerships and potential synergies with other OEMs or technology platforms. It will not just be about costs really, but access to the most efficient and effective technologies that will drive the future of the car industry. And with design that is already hitting the sweet spot (F-Pace, Velar), and the SUV cred others would kill for, JLR could go for the kill – while still developing new markets and growing in size and stature.

What of the other SUV specialist, Jeep? Theoretically, it too is well placed as part of a larger group that has brands like Fiat, Chrysler and Dodge to play with – not to forget Ferrari and Maserati. They too all seek to enhance volume by going the SUV route anyway (yes, seemingly, Ferrari too will eventually have to swallow the bitter pill on this), and will eventually need mass applications of both aforementioned tech needs. But the disarray the Group always seems to find itself in – not to mention constant news on potential takeovers from Chinese or other companies is what keeps them from perhaps realising their potential. Perhaps a big handshake (PSA, are you listening?) is what could do the trick to help not only sustain costs for future development, but also allow for fresh ideas and innovation to flow through more freely.

So it’s going to be scary and exciting as things unfold. The shape of the industry as we know it today is set to metamorphose into something we possibly don’t fully comprehend just yet. But it is a few key players that could stand out and make the difference – more so for their own business than anything that shakes the industry really. I certainly am watching it all with bated breath.