Source | LinkedIn : By Anirban Bhattacharya
Considering a large number of clients we work with are leaders in the auto industry (OEMs and support businesses), discussions in most Design Thinking programmes always veer towards the disruptions in the industry. Reports state that autonomous cars will be commonplace by 2025 and may have a near monopoly by 2030, and the sweeping change they bring will eclipse every other innovation our society has experienced.
We all know the data:
- According to Bloomberg News, GM’s 2017 Cadillac is planned to feature “technology that takes control of steering, acceleration and braking at highway speeds of 70 miles per hour or in stop-and-go congested traffic.”
- Both Google and Tesla predict that fully-autonomous cars—what Musk describes as “true autonomous driving where you could literally get in the car, go to sleep, and wake up at your destination”—will be available to the public by 2020.
- A full 60% of US adults surveyed stated that they would ride in an autonomous car, and nearly 32% said they would not continue to drive once an autonomous car was available instead. Which is logical – Morgan Stanley’s research shows that cars are driven just 4% of the year, which is an astonishing waste considering that the average cost of car ownership is nearly $9,000 per year.
- And a January 2013 Columbia University study once suggested that with a fleet of just 9,000 autonomous cars, Uber could replace every taxi cab in New York City, and that passengers would wait an average of 36 secondsfor a ride that costs about $0.50 per mile.
That’s on one side. On the other is rise and rise and rise of ride-sharing businesses, and where the two shall meet. Uber CEO Travis Kalanick has stated that Uber will eventually replace all of its drivers with self-driving cars.
Now, for some, especially the consumers, this is great news. But what of the humungous cost of this transition?
What will the disruption do to the auto giants that rule the business today? How will major automakers like General Motors, Ford, and Toyota survive the leap, as they continue to produce millions of cars in dozens of different varieties to cater to individual tastes of the past and have far too much overhead to sustain such a dramatic decrease in sales?
And as a recent report I read pointed out, ancillary industries such as the $198 billion automobile insurance market, $98 billion automotive finance market,$100 billion parkingindustry, and the $300 billion automotive aftermarket will collapse as demand for their services evaporates. We will probably see the obsolescence of rental car companies, public transportation systems, and, good riddance, parking, and speeding tickets.
And that brings in the direct human costs – the US Bureau of Labor Statistics liststhat 915,000 people are employed in motor vehicles and parts manufacturing. Truck, bus, delivery, and taxi drivers account for nearly 6 million professional driving jobs. Virtually all of these jobs will be eliminated within 10-15 years, and this list is by no means exhaustive.
It will be cataclysmic for the human population if we consider the impact across the planet. India was the sixth largest motor vehicle/car manufacturer in the world in 2015, and Indian auto manufacturers produced a record 23.4 milion motor vehicles in 2014-15 (Apr-Mar), including 3.22 million passenger vehicles. India is the largest manufacturer of three-wheelers (949 000 in 2014-15) and the eighth largest commercial vehicle (697 000 in 2014-15). None of these are autonomous.