The global automotive industry faces a massive transformation. We can see a significant shift in customer preferences, both in terms of buying and mobility preferences, in addition to the technological trends of connected cars, mobility, and autonomous driving. These developments are not controversial. But what we were missing was an understanding of the impact of these trends on the sales and after-sales business of a well-established original equipment manufacturer.
This study aims to not only create transparency and quantify trend effects and opportunities but also provide strategies and ways to navigate these dynamic and challenging future transition years. This edition of our series examines the markets of China, Japan, Euro5, the United States, and Euro5. Euro5 is made up of Germany, France, and the United Kingdom. Spain and Italy are also included. Deloitte estimates that these markets will cover 70 percent of global new vehicle sales volume by 2035.
- Industry drivers and trends analysis
Deloitte believes that the connectivity of cars (“connected car”), as well as customers (“connected customer”), will vary significantly between markets due to technical infrastructure and consumer preference. By 2035, we expect that nearly all cars sold in the focus markets will be networked.
Only a small fraction of vehicles are expected to be fully connected in terms of V2X by 2035. The high hardware costs will make V2X an expensive option for the passenger car segment.
Figure: Share of new vehicles with V2X technology in 2035
By 2035, 75 percent of new vehicles will be equipped with V2X. Already, 76 percent of people in China believe that greater vehicle connectivity will be beneficial. They are most interested in getting updates on traffic congestion and parking availability.
By 2035, 40 percent of newly sold cars will be V2X-enabled. The United States has the most advanced connected vehicle services and is a leader in autonomous driving.
By 2035, it is estimated that 29 percent of new vehicles sold in Euro5 will be equipped with V2X. Euro5 consumers are generally more skeptical about increased connectivity in their cars. Only 36 percent of German customers believe that it would be beneficial.
Only 49 percent of Japanese consumers agree that greater vehicle connectivity is beneficial.
Deloitte believes that in the future, different drivetrains, including battery electric vehicles, will coexist. Alternative drivetrains are primarily driven by declining production costs, regulations, charging infrastructure, and increased performance.
China has a huge potential in alternative drivetrains. This is largely driven by government initiatives, such as the persistent subsidy for fuel cells and new energy vehicles, as well as direct R&D investment.
US consumers are still largely focusing on ICE-powered vehicles, even though they can be regarded as pioneers in the development of alternative drivetrains.
Deloitte estimates that alternative drivetrains will account for 35 percent of all new cars sold in Euro5 markets by 2035.
Japan has the highest market penetration of hybrids in the world, but only a small fraction are plug-in hybrids.
Shared mobility increases the use of vehicles and transfers ownership from private clients to fleet operators. With the advent of autonomous driving, we can expect rapid growth in mobility services.