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Silicon Valley to Dominate the Auto Industry in the Future

Posted April 21, 2015 9:50 AM by Jordan Perch

It's becoming increasingly obvious that the auto industry is ripe for a disruption, with many signs indicating that automakers are on the verge of losing an entire generation of car buyers, offering vehicles that don't really fit in with modern urban mobility trends. A large portion of the Millennial generation is not interested in owning cars, and the ones who are, usually don't want large, gas-guzzling vehicles that are offered by the U.S. Big 3 automakers, so a radical shift is necessary in order to start attracting young people again. Perhaps the most intriguing part about a potential disruption in the auto industry is that if it happens, it will likely be created by companies that have nothing to do with building cars.

Lately, tech companies like Google and Apple have increased their efforts in ensuring a bigger presence in the automotive industry, bringing about new trends and accelerating the shift towards autonomous vehicles, which are clearly the future of transportation. These two tech giants, along with some other innovative companies from the Silicon Valley seem to be poised to transform the entire industry and introduce a completely new concept of personal mobility.

Google has been working on self-driving cars for a few years now, and in the last couple of weeks, there have been numerous media reports claiming that Apple is also looking to get into the car making business and is already taking steps towards developing an autonomous vehicle on its own. With the world's leading tech companies, and their seemingly limitless wealth, interested in entering the car manufacturing game, and insisting on bringing autonomous cars to market, global automakers have every reason to be worried about their future.

Probably the biggest change that Silicon Valley will introduce in the auto industry is the ever more imminent extinction of traditional car ownership, accelerating the adoption of the increasingly popular concept of car sharing. If driverless cars become mainstream, which both Google and Apple certainly hope will happen, automakers will see a major drop in sales, since the need for households to own more than one car will be eliminated. Households with multiple cars will probably become a thing of the past, since family members will be able to share a single self-driving car without having to worry about conflicting schedules or overlapping trips that would otherwise require more than one car.

This could be a major issue for automakers in the future, faced with the reality of self-driving cars and the possibility of losing a huge chunk of their market share to Silicon Valley. In any case, they have at least a decade before autonomous cars hit the road, and it's up to them to decide which way they want to go - whether they will accelerate development of autonomous driving technologies or take a more self-righteous approach and remain confident that driverless vehicles are nowhere near the mass market. The ones that choose the first option will have a greater chance at avoiding the impact of the disruption that will undoubtedly come from Silicon Valley at a certain point in the not too distance future.

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#1

Re: Silicon Valley to Dominate the Auto Industry in the Future

04/21/2015 10:58 PM

Not in your lifetime Jordan.

Interesting thoughts none the less. Just because we are seeing some demographic trends, does not imply we will CONTINUE on that trajectory.

We are already seeing this to some degree but there are still many, many people who don't live in a big city and don't want to live in a big city. Also, just wait until all these younger Millennials start having kids and the urban migration begins again. Exceptions of course, but many cities are not conducive to families, especially if you decide to have more than a couple of ankle biters.

As for self-driving cars, in spite of the apparent revolution spearheaded by Google and others, we are a long, long, way off from widespread acceptance and implementation. Too many very difficult issues to resolve. This will occur over a period of decades with incremental implementations of various aspects. For people who like to ride a bus, they will like it. For those of us who enjoy driving, not so much.

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#2

Re: Silicon Valley to Dominate the Auto Industry in the Future

04/22/2015 9:33 AM

The idea of a single car for driving made me laugh.

Why stop there, how about a single coffee cup, a single shirt, a single pair of shoes.

Things could be made a whole lot easier if companies would stop producing all different types of products, with all different colors and shapes.

The world could adopt one type , size , shape and color ( may I suggest slate gray ? )

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#4
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Re: Silicon Valley to Dominate the Auto Industry in the Future

04/22/2015 12:18 PM

Summer-vehr!

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#3

Re: Silicon Valley to Dominate the Auto Industry in the Future

04/22/2015 11:02 AM

I fail to see how autonomous vehicles reduce the need for multiple vehicles. More often than not, my wife and I go to totally unrelated places at the same time. Where we live, each trip commonly takes a minimum of 2 hours travel time plus the time to do whatever. We need separate vehicles! There is no way you are going to get me to live in a large city to avoid the travel!

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