Morgan Stanley predicts radical car sector consolidation

A worker assembles a Tesla Model S at the Tesla factory in Fremont, Calif., Friday, June 22, 2012. The first Model S sedan car will be rolling off the assembly line on Friday. (AP Photo/Paul Sakuma)

A lack of technological foresight and changing financial circumstances may possibly deliver dramatic consolidation to the car sector in the up coming 15 to 20 years. Business analyst Adam Jonas at Morgan Stanley believes that the amount of main automakers could go from around 30 today to as handful of as 6 in that time. Even so, a catastrophe is avoidable.

Jonas’; argument is that the world has more automakers than it can sustain. He contends that as well a lot of of them are far more focused on next year’;s designs than attempting to adapt to technological adjust. Without hunting forward, they will not survive.

Tesla may well be the lighthouse major automakers away from the rocks. While still really small, it has disrupted the status quo and shown that there is much more than a single way to prepare for new innovations. “With proper execution, Detroit may possibly thank Tesla Motors for being that stiff board in the back of the head proper when they essential it,” said Jonas to The Detroit Information.

This isn’;t the very first time there has been such doom and gloom about the industry. During the economic crisis, there had been similar forecasts, but in most instances governments helped assistance weakened automakers. In accordance to The Detroit Information, there is been some consolidation between parts suppliers, but not as considerably as initially predicted. If Jonas’; theory is right, it could indicate not only a huge shakeup in the business, but a massive adjust in the planet economy offered how a lot of jobs are linked to building autos.

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