The driverless, car-sharing road ahead

Carmakers increasingly fret that their industry is on the brink of huge disruption

THE whizzy gadgets for geeks to goggle at during CES, an annual consumer-electronics show in Las Vegas, have typically been small enough to pick up. But they have been joined in recent years by an increasing number of cars. The Detroit motor show, America’s biggest and glitziest, starts later this month, but many in the car industry now regard CES, which opened on January 5th, as a more important event. Mary Barra, GM’s boss, unveiled a new production version of its Bolt electric car at Las Vegas this week.

Incumbent manufacturers are recognising the double threat posed by technology, as car-sharing takes off and driverless vehicles come closer. First, some people who might hitherto have wanted to own a car may no longer do so, cancelling out the growth the motor industry might otherwise have expected from the rising middle classes in developing countries (see chart). Second, technology firms may be better placed than carmakers to develop and profit from the software that will underpin both automated driving and vehicle-sharing. Some of these firms may even manufacture cars of their own.

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In a report ahead of the Las Vegas and Detroit shows, Morgan Stanley, an investment bank, said the motor industry was being disrupted “far sooner, faster and more powerfully than one might expect.” It predicted that conventional carmakers would scramble in the coming year to reinvent themselves. As if to demonstrate this, shortly before CES opened, GM announced a $500m investment in Lyft, a ride-sharing service.

To read more : http://www.economist.com/news/business/21685459-carmakers-increasingly-fret-their-industry-brink-huge-disruption