Tuesday, March 31, 2020

Analysts Predict the Future of Autonomous Vehicle Technologies

Huge Growth Anticipated for Private and Commercial Sectors
Shipping News Feature

US – WORLDWIDE – There will be few involved in the transport industry who doubt that the autonomous vehicle sector will grow substantially in the coming years. Trials for both private vehicles and commercial trucks right up the heaviest range are being conducted by all major manufacturers, and some new players, all around the globe.

Now however research from analysis group Frost & Sullivan predicts figures which are nothing short of astonishing for the development of this technology. The company predicts that, with autonomous vehicles (AVs) promising drastically reduced operating expenses and healthy profit margins, there has been a huge inflow of new entrants into the market for autonomous vehicle services.

These companies are offering myriad services for AVs, employing innovative new business models that threaten the dominance of original equipment manufacturers (OEMs), and the study predicts that the autonomous vehicle services market is expected to grow from a ‘mere’ $1.1 billion in 2019 to $202.5 billion in 2030 at a compound annual growth rate (CAGR) of 60.1%, facilitated by mutually beneficial business models across the entire mobility value chain.

F&S latest research, Future Business Models of Autonomous Vehicle Services 2030, predicts that of all the AV services clusters, peripheral services will roughly account for 55% of the market in 2030. The mobility services market is expected to grow from $0.01 million in 2019 to $22.41 billion in 2030, showcasing the most drastic cluster for expansion in the next decade. The autonomous logistic services market is also predicted to develop at a CAGR of 41.7% in the same time frame, driven by consumer demand for faster delivery. Manish Menon, Mobility Industry Analyst at F&S concludes:

“For an autonomous technology to be viable, it needs to have a profitable and sustainable business model. The key challenge is to quickly evolve from the current sales and leasing business models to investing in the assets and capabilities that can support NextGen solutions in the autonomous mobility space and its associated services. This is especially pertinent for OEMs as revenues from vehicle sales and leasing will drastically decrease.”

So it seems the analysts are predicting a future where growth for new vehicle sales will dwindle for the big manufacturers unless they make radical changes to their business models, whilst more nimble newcomers will develop individual technologies to suit a growing market. Hardly an unfamiliar picture given the growth of other technologies in the past few decades. Kamalesh Mohanarangam, Mobility Program Manager at Frost & Sullivan visualises the new future thus:

“Autonomous vehicles can be used to gather data about passengers that can be leveraged to optimise vehicle routing and demand generation. Between 2020 and 2030, OEMs will begin consolidating the car data ecosystem, and vehicle usage data will become the new currency for value creation amongst B2B/B2C entities.”

The growth of this particular sector will of course involve some radical changes in behaviour, both by infrastructure planners and indeed logistics professionals and the general public. F&S say OEMs and service providers operating in this sector can also explore the opportunities in:

  • Realigning business models along the lines of internet and software companies for better implementation of subscription or pay-as-you-go models
  • Mining shared data from OEMs and data aggregators to create new service offerings, analyse efficient vehicle routing, and ensure optimal fleet utilisation
  • Collaborating with governments to integrate planned rapid transport systems with autonomous taxi and shuttle services
  • Partnering and investing in AD technology companies to optimise the movement of goods within the supply chain ecosystem
  • Integrating real-time data tracking systems to enable value-added, in-vehicle, on-demand services suited to passenger preferences

It should be noted of course that these are predictions made on assumptions, and even Frost & Sullivan, whose current report is a part of its Automotive and Transportation Growth Partnership Service programme, a project which freely admits it aims to help organisations identify a continuous flow of growth opportunities to succeed in what is very much an unpredictable future.