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Morgan Stanley Sees Apple & Google as the new Boogeymen of the Auto Industry

10. 0 PA NEWS -

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Morgan Stanley Managing Director Adam Jonas shared his vision at the Automotive News World Congress in Detroit last month, and let's just say that he didn't paint a very pretty picture for traditional automakers. According to Jonas, new auto industry boogeymen Apple and Google are possibly working to create "Autopia" and destroy the industry as we know it today.

 

Are battery-powered electric vehicles a viable business case not only for the automakers that will sell them but also for the people who will buy them? Is autonomous driving science fiction or a reality that is closer than we expect? Will these changes result in a new form of on-demand individual mobility that forces automakers to restructure their sales and production operations and causes customers to reassess their views on car ownership?

 

All these questions could be answered very soon if a futuristic environment called "Autopia" becomes reality.

 

Jonas said newcomers -- such as Google and Apple -- are just as smart and better funded than their potential rivals from the automotive field. Even more important: these companies see the business differently. Here's an example of how different the views are. Automakers see the global market as 80 million vehicles sold at an average price of $19,000, resulting in sales of $1.5 trillion. Silicon Valley's sees a global market where 10 trillion miles will be driven a year at $1 a mile resulting in $10 trillion in revenue. It's a radical new model that would turn the traditional automotive industry model on its head. 

 

The report quoted Fiat Chrysler Automobiles CEO Sergio Marchionne as saying that he doesn't see a bright future for car sharing, nevertheless, he fears that a Jonas-like Autopia would severely damage traditional automakers."

 

In the end, Morgan Stanley's Autopia theory is a doomsday scenario that is very unlikely to come to fruition in respect to mass adoption. And with Apple's Project Titan losing its leader Steve Zadesky of late and Jony Ive reportedly not happy with the project's direction, one of the feared boogeyman of Silicon Valley seems unlikely to be able to deliver the feared blow to the auto industry anytime soon. For more on this story, read the full Automotive News Europe report here.

 

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