Self-Driving Tech To Solve Century-Old Industry Issue: Analyst

Self-driving technologies are likely to help automakers solve a major issue that's been troubling the industry for over a century, Adam Jonas of Morgan Stanley wrote in a research note on Wednesday, as reported by Business Insider. Ever since contemporary vehicles entered mass production, car manufacturers have been struggling with addressing the cyclical nature of the business that experiences major spikes and drops in sales every several years by virtue of the fact that neither consumers nor businesses buy new models on an annual basis. Mr. Jonas believes autonomous vehicles hold the key to breaking that cycle, providing automakers with an opportunity to diversify their portfolios while still staying true to their roots and evolving from companies that sell cars to those that deal in the very concept of mobility.

The vehicle-as-a-service business model is already being explored and is widely believed to be the future of the industry but largely relies on the commercialization of self-driving solutions. With personal car ownership still being a concept that's deeply entrenched in the collective consciousness of the global society, only a revolutionary technology will be able to convince consumers they don't necessarily need to own a vehicle in order to use it like they do, the analyst suggested. Alternatively, some automakers may opt for a different approach and still continue pushing for vehicle sales but bundle them with autonomous driving packages sold as subscription services, hence still being able to generate continuous revenues without challenging people's beliefs regarding the concept of car ownership. Coupled with the established loaning and leasing practices the industry has been using to diversify its operations for years now, the self-driving revolution has the potential to finally ensure consistent annual performance for vehicle manufacturers, Mr. Jonas concluded.

While the automotive sector will be among the first to benefit from driverless transportation solutions for obvious reasons, the global economy as a whole is expected to be transformed once such technology is commercialized. New types of businesses will emerge, existing ones will become more efficient, and while self-driving vehicles are likely to make certain professions obsolete, new roles will eventually be created to support the autonomous driving segment, many industry watchers believe. Some automakers are already expressing even grander ambitions, with Toyota believing it will be able to deliver on-demand cities in the future.

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Dominik Bosnjak

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Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]