Author
Dr. Kyungyou Kim | Director / Senior Research Fellow, System Industry Division, Korea Institute for Industrial Economics & Trade
Executive Summary
Introduction
- Background: The Auto Industry is rapidly evolving due to IT advancements, policy shifts, and social demands. Digital transformation and CASE (Connected, Autonomous, Shared and Electric) technologies are reshaping vehicles into connected, electric, and autonomous mobility spaces.
- Focus
- Impact on automobile industry: Electrification and connectivity are transforming the auto industry, maximizing vehicle use through mobility platforms.
- Change of industrial structure: The rise of CASE is reshaping the auto industry, lowering entry barriers through modularization and electronics, enabling new players like Tesla and BYD to emerge.
- Key Concepts:
- Carbon neutralization: Moving to a dedicated electric vehicle platform
- Digital transformation: Advancing autonomous driving with data learning and Vehicle SW Technology advancement
- Future Mobility: Increase MaaS platform influence
Highlights I: Automobile Industry Paradigm Changes
- Key Considerations:
- Replacing combust engines with electric power simplifies vehicle design and enables advanced connectivity and automation.
- Connectivity links cars to the outside world via cloud, IoT, and high-speed communication, enabling vehicle-to-vehicle infrastructure interaction.
- Sharing shifts focus from car ownership to ride-sharing and vehicle-sharing services.
- Impacts on mobility: The auto industry is expanding beyond manufacturing to include CASE-driven mobility, evolving services like car-sharing and intelligent transport systems.
Highlights II: Mobility Industry Value Chain
- Background: The shift to electric engines adds charging to the value chain, requiring infrastructure, production, and services, with procurement moving toward modular partnerships.
- Key Strategies of Companies:
- Transition to Electric and Automated Vehicle parts: Expanding production of EV parts and electronic components
- Market Leadership and Technological Innovation: Reorganization of vertical automaker-centred ecosystem into an open, horizontal structure
- Increased Role of Smart Technology and Big Tech
- IT and Tech Industry Involvement
- Automated Driving Market Strategies for software (Waymo, Aurora, Cruise, ZOOX) and hardware (cameras, lidar, radar, semiconductor)
Conclusion
“As advancements in mobility industry technology persist, substantial alterations in associated industries are imperative, necessitating M&As for the convergence and incorporation of technology. Traditional internal combustion engine component companies, which are anticipated to experience demand reductions due to these technological shifts, need to categorize their business into core and non-core sectors, acquire or incorporate suitable innovative capabilities reflective of the evolving industrial framework, and extend component companies to attain economies of scale.”
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Mobility Transformation, Konrad-Adenauer-Stiftung, p. 221
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