AFLA Conference Archives-Economist of the Automotive Industry

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Video Summary

Russell Hensley from McKinsey & Company delivered a presentation on the current economics and future trends of the automotive industry. He highlighted the industry's impressive recovery since the 2008-09 downturn, noting profitability levels now average 7-8%, primarily driven by the North American and Chinese markets. Hensley emphasized the significant impact of regulatory pressures, consumer preferences, and advancing technologies like electrification and autonomy on the industry's future. He noted that while battery costs are declining, consumer willingness to pay for electric vehicles remains limited, presenting a challenge for profitability. Future trends like autonomous driving, shared mobility, and connectivity are expected to reshape the industry, requiring integrated solutions rather than isolated advancements. Hensley also addressed the challenges of pricing electric vehicles and the potential revenue streams from connectivity and diverse mobility solutions, such as ride-sharing services. He concluded by discussing the shifting global automobile production trends, particularly the movement towards Mexico for cost efficiency, and underscored the importance of addressing regulatory and consumer demands to ensure continued industry growth and innovation.

Asset Subtitle

Russell Hensley

Meta Tag

Location San Diego, CA

Year 2016

Keywords

automotive industry

economic trends

North American market

Chinese market

electrification

autonomous driving

shared mobility

connectivity

global production

San Diego, CA

2016