Global Automotive Mobility Study from Arthur D. Little highlights market uncertainty

Key findings include:

• Overall demand for vehicles has fallen, with environmental considerations a key factor

• Drivers are increasingly considering the move to electric, but choice and infrastructure remain issues

• Enthusiasm for autonomous vehicles has dimmed, though China remains positive

• Chinese consumers are markedly more positive about new mobility services and EVs compared to the rest of the world

• Manufacturers need to better anticipate changes in vehicle demand and ownership profile

Arthur D. Little (ADL) today released the third edition of its Global Automotive Mobility Study. Entitled ‘The Future Of Automotive Mobility’ and based on a global survey of over 8,500 end customers in 13 countries, it shows that global automotive markets are currently at a crossroads. While the study identifies that the internal combustion engine still dominates the market, many vehicle owners are weighing up the pros and cons of going electric – as a result, there is confusion about where the automotive sector is heading and at what speed.

Whereas ADL’s previous Global Automotive Mobility Study in 2018 depicted a ‘business as usual’ industry only just taking its first steps towards electric, the mobility landscape three years later is markedly different. For example, there has been a dramatic change in both demand for cars and how ownership of them is perceived – while the COVID-19 pandemic has highlighted the protection and independence that a private car offers, a significant number of people are contemplating giving them up for environmental reasons and embracing alternative transport solutions. The auto industry’s 2% compound annual growth rate is much less than ADL’s last survey predicted.

The study also shows that the move away from petrol and diesel fueled vehicles is real and growing stronger – asked about their next vehicle, 29% of survey respondents favored a hybrid product, while 12% were considering the move to pure electric. And if established brands don't provide an EV offering, many of their customers are ready to migrate to other manufacturers. However, market growth is hampered by both limited model range and an immature charging infrastructure, with vehicle range still dictated by the availability of public charging points.

One of the study’s most intriguing findings is the emergence of China as a ‘special market’ with markedly different attitudes to consumers in the rest of the world. For instance, while excitement over self-driving autonomous vehicles has dimmed in both Europe and the US due to safety fears, 71% of Chinese drivers remain positive about using such vehicles. They are also more adventurous in trying new powertrains, mobility services, and even purchase options – 71% of drivers in China would be willing to buy a car wholly online, against 35% in Europe and 42% in the US. Given the size of China’s domestic market, these attitudes could have significant implications for the global automotive industry.

Klaus Schmitz, co-author of the study and Partner in ADL’s Automotive and Manufacturing Practice, comments: “While the global automotive industry isn’t exactly in turmoil, the findings of this study definitely indicate significant turbulence, plus an uncertainty about the speed and direction of the market. Established trends are meeting new, emerging ones, which has inevitably led to a state of flux. We believe that the industry faces four main market-related challenges: how to better anticipate changes in vehicle demand and ownership profile; how to better transition towards electric; how to profitably grow the mobility services segment; and how to optimize the new value chain.”

Wolf-Dieter Hoppe, co-author of the study and Partner in ADL’s Automotive and Manufacturing Practice, adds: “Given the degree of uncertainty in the sector, the automotive industry needs to develop a better understanding of the modern driver’s priorities if it is to fully exploit electric’s potential and counter concerns over autonomous vehicles. This will require an evaluation of current investments and an informed calculation about how markets and the value chain will look in ten years. For those manufacturers who get this right, there will be significant opportunities.”

The study is available for download here: www.adlittle.com/TheFutureofAutomotiveMobility

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