Oliver Wyman Analysis on Digital Transformation- Autonomous Driving Spells Enormous Potential for the Auto Industry and New Market Players

  • The automation of mobility is unlocking new value pools.
  • Strategic partnerships and technological know-how are crucial to competitiveness.
  • Autonomous cars will be be introduced in an evolutionary process.
  • Regulatory and ethical issues are the major launch barriers.


Munich, July 16, 2015 – Soon, the idea of self-driving cars will no longer be a dream. In just two decades, semi- and fully autonomous vehicles will probably account for 20 to 30 percent of global vehicle production. The automation of driving will trigger differentiation of the value chain and create market opportunities for new players. The key question is: who will earn money in the autonomous driving segment? A recent analysis performed by Oliver Wyman identifies the five most important value pools.

Automating individual mobility will revolutionize the automotive industry and its value chain. As a result, both traditional automotive companies and new players, particularly from the IT industry, will have the opportunity to reposition themselves in this market. To compete successfully, it is important that all market players, from manufacturers to suppliers, IT companies, infrastructure providers, insurers, and advertising services providers, identify and capture the market's specific value pools.

"Automakers must now tap new value creation opportunities by entering strategic partnerships. Suppliers, on the other hand, should concentrate on offering state-of-the-art technology at competitive prices," said Juergen Reiner, automotive expert and partner with Oliver Wyman. "Companies that anticipate car users' needs and coming laws and insurance regulations, while providing tailored solutions, will emerge as winners in this new game."

Based on a recent market model, Oliver Wyman found that the combined global market potential of the five most important value pools alone will exceed US$ 200 billion.

  • Greater safety: Accidents with autonomous cars will be 10 times less frequent than with normal cars today. Because car buyers are prepared to invest in additional safety, the revenue potential for manufacturers and suppliers will increase significantly. At the same time, it is likely that the responsibility for insuring a vehicle will shift from the car buyer to the vehicle itself and the dealer. This will give rise to potential new insurance models and transform the insurance market.
  • New mobility services: Autonomous driving will help new user groups to become mobile. It will also free passengers to do other things, such as use the Internet, and shop online.
  • Data use: Autonomous vehicles use and generate large volumes of data that can be extensively exploited for commercial and safety purposes. However, the debate about who is allowed to use this data has only just begun.
  • New logistics concepts: For example, self-driving cars and trucks are ideally suited for improving the efficiency of intra-urban delivery services, especially those cars with an electric drive system. In addition, novel car-sharing offers increase vehicle utilization, reducing the total number of vehicles needed on the roads.
  • City infrastructures: The automation of driving will not only reduce the number of traffic jams, but also the number of cars looking for parking spaces. Less space will be needed for parking. All of this will have a positive effect on the design of urban spaces.

Introduction of autonomous vehicles in an evolutionary process

Fully autonomous cars will not fill the streets overnight. The transition from manual to fully autonomous driving will evolve and involve many small, semi-automated steps, such as driver assistance functions, including adaptive cruise control, lane-keeping assist, maneuvering assistant, roadworks assistant, and autonomous parking in tight parking spaces or garages. Manufacturers began to develop increasingly automated functions some years ago but manufacturers in Europe and the US focus on different activities. European engineering efforts are mostly focused on strengthening traditional vehicle technology and enhancing safety features. In the US, digital ideas and companies are gaining importance and pushing into the market, sometimes with disruptive concepts.

"It is plain to see that formerly non-automotive companies with unconventional approaches, such as Google, Apple, Tesla, and Uber, are the market's innovation drivers," said Joern Buss, automotive expert and partner with Oliver Wyman.

Regulatory and ethical questions

As the development of the autonomous car progresses, it is becoming increasingly clear that the players will soon master all the technical hurdles. The launch of semi- or fully autonomous cars on the roads is still hampered by regulations and, especially in Germany, reluctance among users to accept self-driving cars. In addition, ethical issues are beginning to emerge. Can algorithm-based software consider ethical questions when making decisions in case of an accident? For example, if the autonomous car recognizes that a collision is inevitable, how will it decide between suffering severe damage itself vs. harming people?

Oliver Wyman Analysis on Digital Transformation- Autonomous Driving Spells Enormous Potential for the Auto Industry and New Market Players


Oliver Wyman Analysis on Digital Transformation- Autonomous Driving Spells Enormous Potential for the Auto Industry and New Market Players


About Oliver Wyman

Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across nearly 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 4,700 professionals around the world who help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.