The investment needed to develop connected and autonomous vehicles will likely lead to mass consolidation of car companies globally, according to Aston Martin boss Andy Palmer.
Speaking at the Society of Motor Manufacturers and Traders (SMMT) Connected Car Conference, Palmer said he believes many existing brands will have to form alliances, merge with or sell to rivals in order to survive.
“We’re all developing similar technology costing billions and that’s nonsense,” said Palmer. “I think it is inevitable car companies will come together through mergers and acquisitions. The requirements will be too much for many of the firms involved.”
Today, most analysts put 14 firms at the heart of the global car industry: Ford, PSA Group, Tata, Daimler, VW Group, Honda, Toyota, GM, BMW, Nissan, FCA Group, Geeley and Renault and Hyundai. However, the rise of Chinese brands that are beginning to take significant sales in their home market – the largest for car sales in the world – is set to disrupt that dynamic.
“Yes, enlightened mega companies like Toyota can develop technology alone and survive, but I feel many more companies will fall under the wing of such firms to the point that we have just two or three mega companies dominating, in the way Boeing and Airbus do in the airline industry,” said Palmer.
“Along the way I’m sure we’ll se newcomers, some who will succeed, some who will be bought and some who will fail. But the inevitablity is that there will be mergers and acquisitions.”
Mercedes-Benz and BMW are already collaborating on autonomous technology, while firms such as the VW Group and Toyota are seeking partners to share their electrified technology with.