Four key sector disruptors – technology, new ORMs, Sustainability and a dip in light vehicle sales – have been identified as shaping the future of the automotive with a heightened sustainability focus now shifting the component landscape.
The forecast by Vishal Pandey, Automotive & Mobility Practice, at Glasgow Consulting Group was delivered at the recent Automechanika Dubai Network.
Industry players at the one-day hybrid gathering explored shifts in the global automotive aftermarket industry which is expected to be worth $529.25 billion by 2028.
A focus on autonomous driving, connected cars, electric vehicles, and shared mobility is changing the supplier product mix with a new emphasis on e-motor technologies and battery innovations and a shift away from body exterior and engine systems, suspensions, and wheels, he said.
Pandey pointed to a rise in new electric vehicle OEMs who are helping generate an uplift in sustainability.
“There’s no question that in the future, suppliers with more sustainable footprints will have an advantage in terms of pricing and margin,” he said while predicting that EVs could exceed 15% of the annual auto market in four years.
The sustainability focus, said Pandey, is likely to lead to new sector growth opportunities with the market for e-motor and battery management systems, battery and fuel cells rising by 42% by 2030.
However, Pandey warned that the sector’s sustainability will only be achieved through collaboration across the entire automotive value chain.
“The way the industry is addressing these ongoing challenges is by encouraging more cross-industry collaboration and using advanced technology to increase visibility across the supply chain which is imperative to future success.
“Networks of automotive OEMs and technology companies are also coming together to address industry challenges.
"These include supply chain issues, secure data transfer and management, electrification of the industry including vehicles and charging stations, battery lifecycle management, and sustainable business practices that lead to carbon footprint reductions.”
Pandey also highlighted a decline in light vehicle sales and forecasts the sector may have to wait until 2030 before it regains 2019 sales levels.
Also speaking at the Networking Day was Irfan Tansel, CEO of Al Masaood Automobiles, who looked at current and future mobility trends to watch.
According to Tansel, electrification is one of the key industry focal points now; “Electrification is absolutely the next thing that is happening. The industry driver at the moment comes from emission regulations put in place to protect our planet.
"What is needed to drive this sector forward, especially here in the MENA region, is EV infrastructure and how governments are going to make the shift to reach their individual net-zero goals.
"Another driver of increased electric car adoption is affordability. At the moment the electric version of a combustion engine vehicle costs 50% more, and if you add on the cost of installation of charging stations at your home or office, this price only increases.
"At the moment it is not affordable to a lot of consumers, so investment in research to make EV’s more affordable to the masses is important. If we continue seeing the levels of investment we currently are, I predict mass adoption in the next three to four years.”
Organised by Messe Frankfurt Middle East, the Network also heard from Berna Akinci Head of Marketing at Bridgestone Middle East & Africa and Mark Mathias Sales Director at Trinity Lubes & Grease FZE / Grenvo Lubetech Private Limited.
Automechanika Dubai 2022 will look to build on last year’s hugely successful edition which attracted 20,574 visitors from 129 nations, 578 exhibitors from 47 countries, and 12 official country pavilions.