For years, experts have been warning that the global automotive industry is undergoing seismic changes. With millions of workers employed in car factories and related industries, the effects of this upheaval are sure to be widely felt.

Unlike earlier periods of change in the industry, such as the 1970s, the current destabilization has been caused by a confluence of different factors, each of which has played a part in disrupting an industrial model that has remained remarkably consistent for nearly forty years.

While it would be impossible to predict with any certainty what the automotive world of our grandchildren will look like, it is possible to delineate some of the most powerful forces shaping the industry’s development in the come years. Here are four of the most prominent:

 

Automation

Automation in manufacturing has been a major story for decades, but with the advent of wireless technology and the rise of Industry 4.0, automation has made huge steps in recent years to the extent that global labour markets are no longer playing as significant a role as they once did in shaping where auto manufacturing happens.

With production lines more integrated and automated than ever before, the auto plant staffed by human workers may soon be a thing of the past.

 

Online Purchasing

Manufacturing isn’t the only area where change is happening. The dealership model that has dominated the domestic automotive market for generations is also seeing major disruption, as online alternatives like Kijiji Autos offer shoppers flexible and innovative new ways to shop for and purchase cars.

Dealerships employ more Americans than auto plants themselves, and so changes in the way cars are bought and sold will likely have as profound an impact on the labour market as automation.

 

Self-Driving Cars

Some of the most exciting new developments in Silicon Valley revolve aroundthe increasingly viable experiments in self-driving car design. Self-driving cars have long been a futurist dream, and theorists have suggested that self-driving cars could solve every problem from the high rate of traffic fatalities to urban congestion.

While it isn’t clear how soon self-driving cars might become a viable commercial option, forward thinking automotive companies are planning for a future in which they will be the reality.

 

Renewable Energy

Every car needs an energy source, and as countries turn away from oil and gas due to concerns about scarcity, unpredictable prices, and the threat of climate change, many automakers are taking a serious look at what a car powered solely on renewables might work.

With hybrid cars like the Toyota Prius gaining in popularity every year, and fully electric options now becoming available on the open market, it is just a matter of time before the entire automotive industry switches from fossil fuels to electricity. What that will mean for the economy — and for the companies that have so much invested in the automotive industry — has yet to be seen.

The early 21st century has been a time of enormous economic, political, and technological change: no wonder some pundits have dubbed it “the age of disruption.” This disruption has already had a major impact on industries as diverse as retail, food, and information technology, but it is yet to be seen just how profoundly it will re-write the rules of the automotive sector.

While automation, online sales, self-driving cars, and renewable energy are already having a significant impact on how cars are made and purchased, it is possible the greatest disruption to the automotive industry is still to come.

Published by Ann Simpson