What is the automobile of the future? A personal transportation device, a battery pack on wheels, a rolling smartphone, or a self-driving virtual-reality cockpit with 3D entertainment on offer 24/7 – or all of the above?
Those are the some of the questions the automotive industry is facing as it drives into a fast-changing future. It’s one of the most innovative industrial sectors in the world. That won’t change as a result of the diesel emissions test results scam Volkswagen was discovered this week to be running in the US.
A study by Boston Consulting, a leading management consultancy, ranked 14 automakers among the world’s 50 most innovative companies. The study listed more automakers than information technology corporations among the top 20 innovators. German automakers were among the most highly ranked, demonstrating strong innovation not only in development of high-powered motors, but also in energy efficiency and new propulsion systems – keystones of a climate-friendly future.
Similarly, Thomson Reuters, a global business intelligence and media company, ranked Bosch, Daimler, and Volkswagen as the most innovative automakers and automotive components suppliers in Europe. A third of all corporate research and development expenses in Germany are spent by the automotive industry.
No other country is as closely associated with cars as is Germany. Carl Benz and Gottlieb Daimler were the pioneers who developed the first motorcars that were practical for everyday use, and the country’s automotive engineers have been at the forefront of new developments ever since.
The automotive industry employs three-quarters of a million people in Germany, and millions more in other countries – among them 1.6 million Chinese, nearly a million Americans, and even – to take one example of a country most people wouldn’t quickly associate with the sector – more than a hundred thousand South Africans.
An estimated four additional jobs arise in the automotive sector’s supply chain for each direct car-making job, which leads to an estimate of some 50 million people working in the automotive supply chain world-wide.
But now the sector is in a period of rapid evolution. The number of innovations being produced annually by global automakers is rising, and the intensity of competition is merciless.
The times, they are a-changin’
Volkswagen’s emissions results scam appears to have been connected to an attempt to manage cost pressures. There is simply no excuse for such behavior, and a rapid clearing-up of how this extraordinary lapse in ethics and judgment could come to pass is mandatory. The current scandal at Volkswagen is likely to lead to a healthy industry-wide refocusing in the German automotive sector to ensure such things do not recur in future.
The sector is in for a period of radical technological change over the next decade or two. As we move toward self-driving, self-parking cars that serve as mobile Internet hotspots and entertainment units and an increasing trend toward clean, low-carbon engines, getting from one place to another promises to be a very different experience a few years down the road.
Come what may, German automakers have every intention of remaining among the best and most innovative world-wide.