Frost & Sullivan predicts revenue reduction for OEMs

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Research from Frost & Sullivan into automotive strategies has suggested a loss of revenue as the industry continues to look to automation and electrification.

The Global Key Automakers’ Autonomous, Connected, and Electrification Strategies, Forecast to 2025 report found that while 10 primary OEMs will spend US$345bn on CAV and EV R&D, manufacturers will have to look beyond product supply and focus on providing mobility services. With OEMs investing an estimated average of US$1.43bn in autonomous technologies between 2015 and 2025, the research found that premium and volume auto makers see CAVs as essential to compete in the market.

“In order to match market expectations, OEMs’ present objective is to build cars that can change the form and function, compared with what is currently available. OEMs should focus on collaborating with diverse players such as utilities, charging infrastructure owners, mobility providers, service providers and leasing companies, to establish a potential e-mobility market,” explained Jagadeesh Chandran, Frost & Sullivan industry analyst.

Chandran went on to discuss potential future approaches to the industry: “Challenges with employee retention and protection of development activities are expected to increase with the development of various autonomous and connected car technologies.

“To maintain a foothold in the market, OEMs should keep track of third-party connected car service providers that can bring similar services as OEMs to market at a significantly lower cost through an entirely different monetization model.”

September 20, 2017

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John joined UKi Media & Events in 2012 and has worked across a range of B2B titles within the company's automotive, marine and entertainment divisions. Currently editor of Automotive Testing Technology International, Crash Test Technology International and Electric & Hybrid Marine Technology International, John co-ordinates the day-the-day operations of each magazine, from commissioning and writing to editing and signing-off, as well managing web content. Aside from the magazines, John also serves as co-chairman of the annual Electric & Hybrid Marine Awards and can be found sniffing out stories throughout the halls of several of UKI's industry-leading expo events.

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