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The End of Automotive as we know it...

 

Bob Lutz, the former vice chairman of General Motors has very recently predicted the future of automotive industry - that it has no future. “It saddens me to say it, but we are approaching the end of the automotive era.” Bob says. “The end state will be the fully autonomous module with no capability for the driver to exercise command...You will call for it, it will arrive at your location, you’ll get in, input your destination and go to the freeway".

 

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He predicts the future automotive industry would be dominated by “standardized modules” that are autonomous vehicles, owned by companies like Uber and Lyft. Bob doesn’t count on the public acceptance of autonomous cars either, at least not from the very start. Acceptance of the “big fleets”(Uber, Lyft, Fedex, Ups, National post, delivery company etc) would be enough to get people into autonomous cars. Branding will no longer be relevant as these “modules” are standardized and would only get an "UBER" or a "LYFT" printed on the body. Performance and styling will not matter as well - think future train cabin like modules operating on the road - you can not go too fast or too slow, and they need to be of similar shapes to optimize air resistance at high speed. Automakers will eventually be competing on price and the low-cost provider wins.

 

Personal ownership of cars will exist as a fringe business for people who want personalized modules or reproductions of vintage cars. Dealerships are doomed in the new scenario as well: “The era of the human-driven automobile, its repair facilities, its dealerships, the media surrounding it — all will be gone in 20 years.” Other aspects such as the reduction in road fatalities as a direct result of the autonomous revolution may usher in quicker change.

 

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Changes seem to be already underway. GM Holden, the only manufacturing automaker in Australia has closed its production plant in South Australia last month to move to cheaper locations, signalling the end of Australia’s 100 year automotive industry.

 

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Just last week, Waymo, the oldest company working on autonomous technology at 8 years old and more than $1 billion of funding, announced that it will be inviting people to test the world’s first driverless taxis within months. Its driverless minivans are negotiating the streets of Chandler, a suburb of Phoenix, Arizona. The minivans are intended to cover the entire Phoenix metropolitan area, a region the size of Greater London but easier to navigate thanks to the desert climate and regular grid of streets. 

 

 

The future of cars is very clear in some ways. From ride-sharing to autonomous vehicles - they all signal a shift towards a human-centric approach. Bob certainly has the last laugh. “I won't be around to say, "I told you so," though if I do make it to 105, I could no longer drive anyway because driving will be banned. So my timing once again is impeccable.”

 

 

 

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