As fewer people see the need to buy a car, a majority of automotive executives believe the industry will increasingly focus on making money from peripheral digital services to be used with their vehicles.

The results suggest that producing driverless, electric vehicles to sell to tech firms, such as Google or Apple, that consumers would then pay to use could be a growth area in the industry in the coming years, according to an analyst.

However, manufacturers thought it was more likely that the prevailing business model in 2025 would be centred on producing a vehicle with technological add-ons.

They placed the more traditional production of cars and sale through dealerships second, while selling a connected car then maintaining a relationship with the driver using the vehicle’s connectivity was third.

About 20% of executives, among them many from India, China and south-east Asia, felt the industry would focus more on selling vehicles directly to tech firms – in particular, those whose brand image is not as strong with the public.

Moreover, the report said 74% of executives thought more than half of car owners today would not want to own a vehicle in the future. And 85% of the executives surveyed were convinced their company might make more money by providing the new digital services than by selling cars alone.

Figures from the annual global automotive executive survey also showed that 90% of bosses expect battery electric vehicles to dominate the marketplace by 2025.

The survey was taken of 800 executives in 38 countries. People working for vehicle manufacturers, suppliers, dealers, financial and mobility service providers – as well as car users – took part in it.

(Source The Guardian, Kevin Rawlinson 9 January 2017)

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