Car manufacturers are afraid of the technology: a vehicle attached will be more cost-effective than 10 normal – Financial Daily

By Nicholas Gonzalez Araya, Journal of Financial Online

Fearful of the greater influence that they gain the tech giants, the automotive sector looks ever more askance the importance that is taking on Silicon Valley in the business.

The consequences could be tremendous for that sector and mark a turning point since Henry Ford started the production in series at the beginning of the TWENTIETH century.

According to the Report Global Automotive 2017 prepared by KPMG, 85 per cent of senior managers in the automotive industry believes that, in the future, all related to digitization and the internet connection of a car will generate more revenue than the mere sale of the same.

More specifically, 76% of executives estimated that only one car which is digitized and connected we shall mean the companies more returns than 10 conventional cars.

according to the study, which involved nearly 1,000 officers and more than 2,400 drivers from 42 countries, “all the auto companies see a future that goes more for the pay-per-use that for the sale of motor vehicles”.

And it is precisely the demand for a digital ecosystem which has attracted the interest of unexpected competitors in the industry of technology. According to KPMG, the 82% of managers think that a Silicon Valley-based company will launch a model new car in the next 4 years.

however, to his relief, 78% expected that the machine will be assembled in one of the assembly lines of the traditional companies in the sector.

In that context, the million dollar question is “if the companies in the ICT world will want or not to provide a complete package to the consumer, i.e., the vehicle, the digital ecosystem, user interface, mobile solutions, etc.”.

“And this opens the question of whether the new players will cooperate or compete with the traditional,” warned Francisco Roger, partner of KPMG and was responsible for the report.

On this dilemma there is a common vision between the managers; a 45% predicts that the ICT companies and manufacturers to cooperate, and 55% believe that they will compete in the future.

however, in what seems to be a consensus on is that the digitization will convert the data into the fuel that will mold the new business scheme in the industry.

Unfortunately for the automobile companies, the data generated by a car belong to the client. From that edge, the study pointed out that there is little willingness of users to share their information of consumption and behavior without receiving a benefit in exchange. In 2016, only 30% said it would, and face-to-2017 the percentage is reduced to only 20% willing to give up their data for free.

In other trends, KPGM found that 53% of managers said that the diesel engines will be the first stop to occur, a victim of the revolution that will come hand in hand with electric vehicles.

however, 62% of managers considered that these cars (the main business of Tesla, for example) will not succeed long-term by the challenge of building a charging infrastructure and for the time it takes to charge the batteries.

For the same thing, a 78% believe that the real breakthrough in electric mobility will come from the hydrogen fuel cell, given that it can be loaded much more quickly and at a service station traditional.