Auto sector set for overhaul

Robert Gottliebsen
SEPTEMBER 25, 2015
BUSINESS SPECTATOR
Over the next decade many industries face fundamental change. But none will be greater than in the motor industry.
And unfortunately the Volkswagen affair will lower the trust in many motor companies on the eve of this transformation, providing an opportunity for groups such as Google and Tesla to make inroads.
The basic motor car has not changed greatly in 100 years. But don’t let that fool you. The changes coming to motoring in the next decade will turn the business of driving, insuring and servicing cars on its head.
The motor industry in Australia is a $30 billion-plus industry encompassing retailers, insurance companies, service stations, road makers and many other sectors. All face fundamental change. I don’t think society is ready for this change and the speed with which it will take place.
The main driver of that change is the driverless car, but we are also going to see a dramatic rise in electric cars and eventually we may even have a hydrogen car. Lower oil prices may stunt the growth of electric cars, but as battery technology improves, the car may emerge as a residence’s power storage unit. Google sees the car as simply a mobile phone on wheels.
And the start of the change will be upon us within two years.
I had a fascinating yarn with one of the people at the forefront of analysing the looming motor changes, Neale Phillips, who is strategy director at the Thatcham Research Centre in the UK. I recommend the video to you.
Thatcham Research is the motor insurers’ automotive research centre and while its original aim was to reduce the cost of motor insurance claims, it is now at the forefront of the latest global vehicle technology research, spanning safety, security and repair.
The first step in the change is less than two years away because by that time on the market will be cars that can be driven in a conventional way but also can drive themselves. There is a myriad of regulations to be fixed before you will be able to flick the automated switch.
Meanwhile as part of the trend we are introducing assisted safety devices, such as emergency braking systems which will brake for you, both forwards and in reverse. If the driver is not paying attention, the brakes will cut in and stop the car. They are now being fitted on around about 70 per cent of new vehicles in the UK and are slashing the accident rates.
Also coming onto the market are forward collision warning systems and an audio device that warns you if you’re getting too close to the car in front. There is also blind spot detection. All these systems are part of the build up to automated driving. They will lower the insurance risks and greatly reduce car deaths and injuries.
In terms of the fully automated cars, the technology exists now and they they’re being trialled in the US.
Thatcham’s best guess is that it will come into the mainstream in about 10 years.
Once the automated cars arrive, roads will be able to carry much greater volumes of traffic. It will be a boon to older people but probably means the end of taxis as we now know them now.
Motor is not the only industry that is going to be transformed, but I suspect it is going to affect the most households