Goldman's 7 Auto Industry Megatrends For The Next Decade

Wayne Duggan
0

In a new report, analysts at Goldman Sachs focused their attention on the paradigm shift they see coming in the next decade for the auto industry. Analysts laid out their seven megatrends for the industry for the next 10 years.

1. Electric Revolution

With both traditional auto makers such as General Motors Company (NYSE: GM), Ford Motor Company (NYSE: F), Fiat Chrysler Automobiles NV (NYSE: FCAU), Honda Motor Co Ltd (ADR) (NYSE: HMC) and Toyota Motor Corp (ADR) (NYSE: TM), as well as modern technology companies such as Tesla Motors Inc (NASDAQ: TSLA), Apple Inc. (NASDAQ: AAPL) and Google Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) all either producing or rumored to be developing electric car models, Goldman analysts project that 25 percent of global automobiles sales in 2025 will be electric vehicles.

Related Link: 10 Technologies That Cars Will Have By 2020

2. Weight Reduction

Reducing automobile weight by 50kg cuts CO2 emission by Ig/km, and Goldman believes that the materials of choice for reducing vehicle weight will be high-tensile aluminum and steel. This demand could mean big opportunities for aluminum and steel producers such as Alcoa Inc (NYSE: AA) and United States Steel Corporation (NYSE: X).

3. Autonomous Cars

Google wants to create a full self-driving (Level 4) car by 2017, a move that could completely transform transportation.

4. Mega Suppliers

Goldman sees consolidation on the way and expansion of mega suppliers to offset growing costs.

5. New Entrants

The growing reliance on technology in modern automobiles is paving the way for new tech-based entrants to join the auto space.

Related Link: Daimler, Qualcomm To Collaborate On Connected Car Technologies

6. Connectivity

The increasing Internet connectivity in automobiles will change the landscape of auto-related businesses ranging from insurers to rental companies.

7. Emerging markets

Goldman projects 35 million vehicles on the road in China and 7.4 million in India by 2025.

Image Credit: Public Domain

Latest Ratings for GM

Apr 2015

Buckingham Research

Downgrades

Buy

Neutral

Apr 2015

Susquehanna

Maintains

Neutral

Mar 2015

Morgan Stanley

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Underweight

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