Car makers in 2019: The State of Play

Characterised by constantly evolving technologies and relentless one-upping amongst rival brands, the global automotive industry is in a state of flux, and now more than ever. Electric vehicles (EVs), digital technology, artificial intelligence (AI) and self-driving cars – the list goes on. Despite these exciting developments, however, the global automotive industry is expected to face multiple challenges in 2019, with many of the world’s biggest original equipment manufacturers (OEMs) set to be particularly affected. In early signs of trouble to come, China in 2019 saw a decline in vehicle sales for the first time in over 20 years, while the US market grew only marginally. This downtrend has been exacerbated by the first real indications that Brexit will finally happen after years of gridlock, as well as the US-China tariff war. The economic and political fallout from these events are expected to be felt until at least 2020, with global markets expected to rebound by 2023.

Looking back on 2018 may lend some insight into projected trends and patterns for the rest of 2019. Last year, global passenger vehicle sales limped to a marginal increase of just over 400,000 units – lower than some observers had predicted. On the other hand, technology companies, having made their incursion into the automotive industry not so long ago, appear to have become permanent fixtures in the industry – the relentless rise of ride-hailing apps such as Uber, Lyft, DiDi, Grab, and Go-Jek has led to a combined net worth estimated at over US $230 billion.

2019 looks set to pick up where 2018 left off, as technology-driven disruption continues to shake up the industry. Hybrid and electric cars will make up an increasing proportion of all vehicles as major manufacturers – the more prescient ones, at least – begin to shift their focus towards sustainability and clean energy, and hybrid car sales grew a considerable 27% in 2018. Indeed, established carmakers now have to contend with as many as 270 start-ups from across the world seeking to launch another hybrid or electric vehicle, as consumers continue to be enamoured with green tech and ‘clean’ cars. This trend appears unlikely to wane; as such, carmakers who have so far neglected the hybrid and electric car segments risk being left in the dust. With the tightening of emissions regulations, particularly in the EU, the industry’s evolution and transition towards first hybrids and eventually EVs looks inevitable. Already, more than 43 electric and hybrid models are set to be rolled out in 2019 – 25 ‘true’ electric cars (EVs) and 18 plug-in hybrids (PHEVs) – with, quite likely, more to come. Electric and hybrid vehicles look well positioned to dominate in 2019 and beyond, and global EV and PHEV sales are expected to grow 38%, reaching 6.67 million units.

In a similar vein, Internet of Things (IoT) and AI technologies will continue to transform the automotive sector, revolutionising vehicle and device interconnectivity and autonomous driving, among other things. Self-driving vehicles have already been piloted by Tesla, and could become a regular fixture on our roads sooner than we think. In addition, the burgeoning field of IoT and AI tech could lead to unprecedented new possibilities. Picture this: a driver cruising along as he furiously taps the keys on his laptop may be a disconcerting sight on the highway, but in the near future, this exact scenario will be possible even without being particularly adept at multitasking. IoT technology can transform your car into a portable office, with an in-vehicle, AI-enhanced digital personal assistant – much like Microsoft’s Cortana, but smarter – that is capable of doing everything from organising your timetable and arranging meetings to taking charge of climate control. This could redefine the driving experience, making it both safer and more productive. R&D in 2019 promises to take us ever closer to a future populated by self-driving, all-electric vehicles that promise to bring unparalleled reliability while relieving drivers of the burden of taking the wheel.

Even amidst such optimism, however, the automotive industry will have to face a number of challenges in 2019. Despite a rapidly growing middle class in developing countries around the world, new vehicle sales in emerging markets like Thailand, Turkey and Slovakia are expected to decline slightly this year due to rising vehicle costs and cannibalization by public transportation and the ubiquity of ride-hailing and ride-sharing platforms. Adding to the gloom are Brexit and the US-China trade war, two events with wide-ranging political and economic ramifications.

Ultimately, optimism fuelled by the breakneck pace of technology, especially in the fields of AI, IoT, and electric vehicles is tempered by genuine fears of an economic slowdown precipitated by the Sino-American trade war, the uncertainties of Brexit, as well as a slowing Chinese economy and an increasingly protectionist America.

Helena Ma brings with her a wealth of experience and a truly cosmopolitan perspective, having lived and worked in Shanghai, China; Gothenburg, Sweden; and London, UK. Her stints in Europe and China has armed Helena with a potent blend of ancient Chinese wisdom and contemporary Western knowledge which she incorporates into business management and client project