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Asean & Global Updates
POSTED | 14:11 PM | 09-11-2017

Car industry ‘has no future’

It’s not every day a titan of industry predicts the demise of his own. But Bob Lutz, the former chairman of General Motors, believes the auto industry is not long for this world.

“It saddens me to say it, but we are approaching the end of the automotive era,” he writes this month for Automotive News. Our daily travel, he predicts, will migrate to standardized passenger modules as the demolition of the traditional auto industry accelerates.

Within five years, he expects, people will start selling their cars for scrap or trade them in for autonomous passenger modules as self-driving cars take over transportation.

Within 20 years, human-driven vehicles will be legislated off highways. Companies like Lyft, Uber, Google and other technology companies will take charge of an industry now centered in Detroit, Germany, and Japan.

“The end state will be the fully autonomous module with no capability for the driver to exercise command,” he writes. “You will call for it, it will arrive at your location, you’ll get in, input your destination and go to the freeway.”

Fleet owners like FedEx and UPS will be the first to defect to self-driving vehicles. Cost savings from autonomous (likely electric) vehicles are just too great. Others have predicted the same thing: RethinkX, a Bay Area think tank, expects shared autonomous electric vehicles will account for almost all road travel by 2030, thanks to their low maintenance and fuel costs, as well as their ability to work around the clock.

Lutz started his automotive career at GM in 1963, then went on to have senior leadership roles with BMW, Ford, and Chrysler until retiring in 2010. His view of legacy car companies is nothing short of apocalyptic.

He predicts the companies that actually manufacture cars will become less valuable as the importance of those that own fully autonomous fleets grows. Expect the relationship between companies like Ford and Uber to resemble the one between Foxconn and Apple: manufacturing companies make products in obscurity, while technology companies grab most of the visibility and profits.

Premium-car makers and dealerships are doomed. As transportation is commodified into an on-demand service, the market for individually owned cars will shrink, and be kept afloat by only a few car fanatics.

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