Connected car report 2016: Opportunities, risk, and turmoil on the road to autonomous vehicles

Oct 2016

The race to build the fully connected car, and ultimately the completely autonomous vehicle, is already under way. Who will cross the finish line successfully, and where exactly that finish line is, remains to be seen. In this report — based on extensive market research, interviews with auto industry experts, and engagement with auto manufacturers, suppliers, and technology companies across the globe — the automotive practice of Strategy&, PwC's strategy consulting group, addresses these questions.

The report is divided into seven sections, each of which focuses on one key question about the opportunities and risks to be found in the industry's business models, ecosystem, market growth, geographic distribution, and technologies involved in developing the connected car. There is one section talking specifically about China.

The growth of China's auto industry has been remarkable, and it is already the largest in the world. Sales of light vehicles through May 2016 were on pace with the economy as whole, up 6.9 percent to 10.2 million units, thanks in no small part to the tax stimulus that will continue through 2016. And even as locally made vehicles grow in popularity, China will continue to be a key growth market for automakers and suppliers around the world.

The growth of connected car and autonomous vehicle technologies makes the Chinese market even more critical. Here, Chinese automakers and suppliers already seem to have a distinct advantage over their foreign competitors. Indeed, thanks to a virtuous circle of connected consumers, supportive government, and advanced technologies, China may take the lead in the worldwide race to build connected cars.

China's largest internet and technology players are already shaking up the automotive industry by accelerating new technologies to develop smart operating services and features for connected cars and autonomous driving. To gain a competitive advantage against new entrants from technology companies, traditional automakers must identify the right, strategic partnerships between technology companies and auto-manufacturers in order to gain access to technologies. This will determine which brands can establish an eco-system of connectivity that can transform the driving experience of China's digitally sophisticated consumers.

How will China move into the connected car market, and how will those efforts, abetted by its digitally sophisticated car buyers and broad range of innovation, affect the car of the future? Click to read more from our report [ Connected car report 2016].

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Bill Peng

Partner, PwC Hong Kong

Tel: +[86] (10) 6563 8300

Marco Fischer

Director, PwC Hong Kong

Tel: +[86] (10) 6563 7119