The Tesla and Uber effect
Tesla and Uber are disrupting automobile industry in many ways . The deep structural shift is slowly happening with combined effect of these companies . The success of Tesla is in re-imagining the automobile . A Tesla Car which is expensive as of now is essentially a computer on four wheels. The existing automobile industry is based on internal combustion engine. Tesla's electric engine car will restructure the existing industry. The number auto parts used in Tesla has gone down substantially while digitization has increased and improved performance. Ten years from now Petrol and Diesel cars will be antiquated. Tesla is hastening this revolution. The big five car companies are following that. Tesla has started adopting online distribution and sale of car, cutting down the dealership network to cut down the cost and also price. Consequent to this revolutionary change, research in self driving car will also have far reaching impact on automobile industry. Vehicles like Trucks and buses which run on highways will be first to adopt and use
The second disruptive effect to automobile industry is is coming from Uber . With availability of Uber is becoming ubiquitous, people have stopped buying third or second car in the family . Uber, Lyft, Ola and many others will hasten the process of commoditising cars. it will cost much less to rent a car than to buy and maintain it. The futuristic prediction is that when self driving cabs are available on road 24X7 , very few will purchase second or third car in the family. The growth of automobile industry is seem to be affected and is going to slow down.
Today's Economic Times has news item that car manufacturers are going to give cars on monthly rental. This is a kind of response for the future of auto industry. The new generation of users will not interested in buying cars if cheaper rentals are available . Car manufacturers will seek growth in becoming a car rental company. This is quite interesting times where old business models are giving way to new business models and ideas. It will be painful in the short run .
Owner at SWASTIK HRD AND HRM CONSULTANCY.
5 年Automobile industry is in for lot of turbulances in the coming times. Companies are coming out with concept of car rentals which are much economical and competetive than buying a car. It is benefitial for car companies as they would be required to maintain lessor stocks. The car manufacturers have already reduced production by about 20% as inventories were increasing with dealers because of dwindling sales with times. Switching over to BVI series of fuel by April 1920 and stress to switch over to cleaner fuels is effecting heavily on slowing sales.
P.L.Eng., CEM, LEED Green Associate, MIEEE
5 年Sure, I agree.