Megatrends and new research agendas in the automotive industry

Abstract

Based on the three emerging megatrends in the automotive industry, this chapter examines the potential challenges for technological innovations in the passenger vehicle sector and how the changing competitive dynamics in the industry could impact on our conceptualization of potential research topics. The electrification of powertrains, digitalization of control systems, and autonomous driving have all reshaped competitive dynamics in the automotive sector by disrupting the current division of component supply by industrial sector. Two major research agendas are appearing: the intersections and competitive dynamics between industrial sectors, and local versus global production networks with respect to the resilience of supply chain management. These megatrends are 'disruptive' as they not only blur the boundaries between industrial sectors used for trade and manufacturing statistics, but also create new players, even 'new sectors'. The potential impact of artificial intelligence (AI) in autonomous driving muddies the distinction between software and hardware in manufacturing. These megatrends demand that researchers reconceptualize how to reclassify and research manufacturing by industrial sector. This demands the reclassification of industrial output and international trade data, and potentially, a review of what the corresponding data is for the appropriate collection and research methods. The automotive industry is one of the most globalized manufacturing sectors. Although the bulky chassis is normally manufactured near the assembly plant, the tens of thousands of key parts and components are made by specialized suppliers located all over the world. The current trade friction between the US and China, as well as between the US and Europe in the automotive sector, has already generated the pre-conditions for decoupling. The COVID-19 pandemic has ruptured the supply chains of automotive parts and resulted in the stoppage of various assembly plants in major automotive powerhouses. This calls for further research into the resilience of supply chain management and the potential impact of localized supply chains on regional economies.