Automotive Industry Trends, Part 2

May 8, 2010 |  by

Hybrid Car Parking SignsElectrification of the motor vehicle is an area of much increased R&D activity of late. The popularity of new powertrain technology will only grow. Market leaders will be those companies that have their fingers on the pulse of consumer trends and behavior.

  •  Strong consumer demand and the need for environmentally friendly vehicles with low emissions have resulted in tremendous innovation and advance in powertrain technology.
  • Differing infrastructures and consumer needs around the world will require a portfolio of vehicle solutions. Successful auto companies will be those best able to accommodate the varied needs and preferences of their global customers.
  • In a recent survey, over 10% of US drivers, which equates to approximately 20 million drivers, said they would consider purchasing a plug-in hybrid or electric vehicle.  Even if only a small portion of the 10% are serious, there would still be enough demand to sell out the 2010 and 2011 production runs of the major and new manufacturers.
  • Some of the biggest challenges for advancing the popularity of new powertrain technologies from the niche into the mainstream are access to charging stations, battery driving range and vehicle costs.

The Federal Reserve Bank of Chicago is preparing for Monday’s conference on the future of the auto industry (After the Perfect Storm).  The meeting will focus on factors shaping the competitiveness of carmakers during the next decade. Four factors will receive attention: the existing uncertainty regarding engine technology, the need for flexible production systems, the extent to which carmakers need to globally integrate their product strategy, and the importance of successfully managing the supply chain.

I recently developed an analysis of US automotive industry trends, and it looks like the ability to successfully market new powertrains will be key.  Ten years down the road, who will develop the powertrain that carries the brand identication comparable to “She’s Real Fine My 409”?

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