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Friday, 01 November 2019 21:43

Automotive Industry Faces Disruption Driven by Societal Changes

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“It is my belief that every aspect of the automotive industry value-chain will be disrupted in some way, shape or form. I also believe there will be a small percentage of existing businesses that will figure out how to be a disruptor, a large percentage of existing business that will be disrupted, and last but not least, there will be new companies that enter the automotive market as disruptors,” wrote industry leader Frank Terlep near the opening of his new book, Auto Industry Disruption – Who and What is Being Disrupted, and What To Do About it.

Since the earliest days of the collision industry trade magazines in the mid-1960s, columnists, editors, industry leaders and pundits have consistently exercised two themes to talk about the state of the industry. The first one is, “We have seen more change in the last five years than we saw in the previous 20.” The other is, “We are roaring into the future and evolutionary or revolutionary changes will be taking place. Get ready now for the future.”

 

Terlep’s book follows a similar theme, but the “intensity switch” is turned all the way up to its highest setting. It is not just the collision industry side of the business that is being affected. The entire automotive industry is changing, changing right now – changing before our eyes, in ways that are more profound than ever before. The changes are not evolutionary, not even revolutionary – but are best described as “a disruption” driven by technology, socio-economic and demographic change and the emergence of new business models.

 

Automotive technology is changing quickly. Cars are no longer cars but computers on wheels and technicians will need to learn how to properly repair, reset and recalibrate a damaged vehicle to make it road-worthy and safe again. Hardware technology is increasing computing power, miniaturizing it, and making components easier to install. Software technology is changing, allowing a vehicle to receive software updates on the fly without ever visiting a dealership. Broadband connectivity will disrupt car ownership models allowing ridesharing and provide the foundation for intelligent transportation systems.


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