The global automobile industry - worth $3.5 trillion in annual revenues - faces four concurrent disruptive threats: the connected car, the electric vehicle, autonomous driving technology and the concept of transport-as-a-service. Each threat is potentially existential to the legacy carmakers who operate in a low growth, low margin sector that rattles with over capacity, and which is seeing its supply lines reset by cumulative advances in enabling technologies typically deployed by the Tier 1 automobile sub-system suppliers.
By 2021, the motor majors, such as GM, Volvo, Daimler, BMW and Ford, will run ride hailing services alongside Didi Chuxing, Uber, Grab, Ola and others, with Google Waymo leading the way with an autonomous commercial taxi service this year in Chandler, Arizona.
The advances in automobile technology will be remorseless and will almost totally reset the industry’s supply lines and value chains within five years.
On a 10-year view, the macro socio-economic effects of urban millennial and Generation Z attitudes towards car ownership and mobility will have a dramatic effect and yield a motor industry largely based on selling ‘rides’, increasingly deploying autonomous mobility, and ‘monetising’ miles: an emergent industry that will probably be as large as today’s automotive industry.
Companies mentioned in this report: Alphabet, Apple, Aptiv, Aurora, Autoliv, BAIC, Baidu, BMW, Broadcom, Byd, Continental, Cambricon, Daimler, Delphi Tech, Denso, Didi Chuxing, Embark, Fiat Chrysler, Ford, Geely, GKN, GM, Great Wall, Honda, Infineon, Intel, Joyson, Lyft, Mahindra, NIO, Nissan, Nvidia, NXP, Qualcomm, SAIC Motor, Samsung Electronics, STMicroelectronics, Suzuki, Tata Motors, Tenneco, Tesla, Toyota, Tung Thih, Uber, Valeo, Velodyne, Volkswagen
This report is part of our ecosystem of thematic investment research reports, supported by our “thematic engine”. About our Thematic Research Ecosystem:
- The author has developed a unique thematic methodology for valuing technology, media and telecom companies based on their relative strength in the big investment themes that are impacting their industry. Whilst most investment research is underpinned by backwards looking company valuation models, the author’s thematic methodology identifies which companies are best placed to succeed in a future filled with multiple disruptive threats. To do this, the author tracks the performance of the top 600 technology, media and telecom stocks against the 50 most important themes driving their earnings, generating 30,000 thematic scores. The algorithms in the author’s “thematic engine” help to clearly identify the winners and losers within the TMT sector. Our 600 TMT stocks are categorised into 18 sectors. Each sector scorecard has a thematic screen, a risk screen and a valuation screen. Our thematic research ecosystem has a three-tiered reporting structure: single theme, multi-theme and sector scorecard. This report is a Multi-Theme report, covering all stocks, all sectors and all themes, giving readers a strong sense of how everything fits together and how conflicting themes might interact with one another.
- Our thematic investment research product, supported by our thematic engine, is aimed at senior (C-Suite) executives in the corporate world as well as institutional investors.
- Corporations: Helps CEOs in all industries understand the disruptive threats to their competitive landscape
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- TECHNOLOGY BRIEFING
- Technology trends
- Macroeconomic themes
- Regulatory themes
- VALUE CHAIN
- Specialist components
- Autonomous driving systems
- Transport networks
- INDUSTRY ANALYSIS
- Industry drivers
- Technology challenges
- M&A activity
- COMPANIES SECTION
- Public companies
- Private companies
- AUTOMOTIVE SECTOR SCORECARD
- Who’s who in the automotive sector
- Thematic screen
- Valuation screen
- Risk Screen
- APPENDIX: OUR THEMATIC RESEARCH METHODOLOGY