So where are they driving
© Jasper James/Getty
December 2016

So where are they driving

Whether or not the future will belong to self-driving vehicles has long ceased to be the question, it’s only a matter of when. But what markets are autonomous vehicles going to conquer first? Some experts expect threshold countries to be the front runners – an assumption that surprises at first glance and is not unanimously shared.

What mobility of tomorrow should ideally look like is clear: preferably powered by electricity, obviously from renewable sources – and in large part autonomous. The reason is that if the rapidly growing conurbations in threshold countries should be quenching their future thirst for mobility with conventionally powered automobiles the Paris Agreement on climate protection that entered into force at the beginning of November 2016 will simply become infeasible. However, such zero-emission, self-driving vehicles would not only improve air quality in the growing megacities in the short term and, in the long term, benefit the climate. Self-driving buses or cars in consolidated fleets for short-range public transportation in the burgeoning big cities could also cause traffic to flow again. Due to more efficient operation, the number of vehicles in the city decreases and streets and roads would no longer be prone to current levels of congestion. Today, traffic jams for miles and miles are the rule.

Pragmatic decisions in threshold countries

But is the assumption realistic that threshold countries are going to directly cover their pent-up transportation needs with the latest technology? Nicolai Müller, an automotive expert with the consulting firm McKinsey & Company, is skeptical in this respect: “The lack of infrastructure is a major impediment for new technologies such as e-mobility and automated driving.” Therefore, it would have to be developed step by step. “In threshold countries, electric cars and self-driving vehicles are going to catch on later than in regions like Europe, the ­United States or China,” says Müller.

Although Toyota’s technology press spokesman Dirk Breuer essentially shares this view, he also points out an advantage that many threshold countries have: “In contrast to Germany, which is almost over-regulated, decisions in threshold countries are made fast and pragmatically,” says Breuer. 

Consequently, some experts feel that it’s entirely possible for autonomous vehicle technology to be implemented faster in threshold countries than in Europe and the United States. “When you think about the infrastructure that’s being created in places like China and India, they can actually plan and build for autonomous vehicles, where we are retrofitting everything here in the states,” Rebecca Lindland, from the U.S. automotive research company Kelley Blue Book, said in a recent interview.

So where are they driving© Jasper James/Getty
China is waiting impatiently, but the Old World isn’t

People in threshold countries would certainly welcome the new technology, according to a recent “Automobilbarometer 2016” study of Commerz Finanz GmbH, an institute specializing in loans for cars and other consumer goods. A survey of 8,500 consumers in 15 countries revealed that China at 91, Brazil at 73 and Mexico at 69 percent responded favorably to the question “Would you want to use an autonomous car?” indicating an above-average interest in this forward-thinking technology. 

This stands in stark contrast to the countries that play key roles in developing the technology. Approval ratings in Germany are at a mere 44 percent, the United Kingdom at 36 and the United States at 32 reflecting even lower acceptance. These figures prove that the automobile in its most advanced form will probably be adopted much faster in the surveyed threshold countries than elsewhere, write the authors of the Commerz Finanz study. This view is shared by U.S. analyst Lindland, who provides another argument in support of fast adoption, assuming that it would be highly unlikely for people who never owned a car before to miss anything when using a ride-sharing service based on autonomous vehicles. This is exactly what the two U.S. ride-sharing industry giants Uber and Lyft anticipate as well. Both are involved in driving the development of autonomous cars and are now beginning to scour the new markets. Uber, for instance, has been increasing its activities in the African marketplace since last year.

Efficient technologies for treshold countries
  • So where are they driving
    © Schaeffler
  • So where are they driving
    © Schaeffler

Irrespective of the question of whether or not self-driving vehicles are going to spread particularly fast in threshold countries in the future, conventional vehicles are increasingly being registered there as well: reasons enough for Schaeffler to offer efficiency-enhancing solutions in this field too.

Particularly in Asia and Latin America, a major portion of personal transportation needs are covered by mopeds and motorcycles. For them, Schaeffler offers numerous newly developed components such as chain tensioners and tooth chains, starter freewheel systems and specially sealed bearings. These innovations not only reduce friction and wear, but also weight and the required assembly space.

Schaeffler’s demo vehicle “Efficient Future Mobility India,” for instance, proves that cost-efficient technologies can also reduce CO2 emissions in the passenger car sector. Electronic clutch management, variable camshaft timing and a thermal management module optimize fuel economy in this case.

“Talking to the people on the ground and understanding them and their needs takes time that we actually don’t have in the light of climate change”

Rainer Kurek, CEO Automotive Management Consulting
Does autonomous mean cheap driving?

The higher purchasing costs of autonomous vehicles would not affect the users, according to experts. Over the long run, the respective ride-sharing services would recover these costs due the vehicles’ long useful life and cost savings for personnel. Consequently, for most people, it will be far more economical to hail an autonomous car on demand than to own one. This might be another aspect promoting the spreading of self-driving vehicles in threshold countries.

Now, one would think that the cost factor should be a selling point in the western world as well. Researchers from Columbia University in New York have calculated that the price per mile for a taxi ride in New York of about four dollars today could drop to half a dollar as a result of the more economical operation of a self-driving taxi fleet. This means that the average American who travels some 12,000 miles by car would pay 6,000 dollars to cover this distance in a robotic taxi. This would be hard to beat with a privately owned vehicle. Still, in most regions where the traditional automobile has become firmly anchored in people’s lifestyles, the switch to the new technologies can be expected to occur at a slower pace, as habits and traditions ­inhibit the process of transformation, the Commerz-Finanz study concludes.

However, by 2035 at the latest, autonomous vehicles will have become established around the world – this, at least, predicts the strategy consulting firm Oliver Wyman. At that time, partially and fully automated vehicles could account for 20 to 30 percent of the global vehicle production. So, there’s not much time left to prepare: “For automakers, it’s crucial now to cover the new opportunities of creating value by entering into strategic partnerships while suppliers should concentrate on providing cutting-edge technology at competitive prices,” says Juergen Reiner, an automotive expert at Oliver Wyman. “The most successful players will be anticipating the requirements of the vehicle users, the development of relevant legislation and insurance terms, and offer tailored solutions.”

  • Over $ 500 M
    has been invested by GM in ride-sharing service and Uber rival Lyft.
  • From 2021
    on, Ford is planning to launch self-driving taxis – without steering wheels, brakes and gas pedals.
  • Some $ 60 B
    per year could be saved by U.S. insurance companies alone by 2040 due to increasingly autonomous vehicle traffic and the resulting decrease in accidents.
Cultural knowledge is very important

In this context, Rainer Kurek, CEO of the technology consulting firm Automotive Management Consulting, in Penzberg, Germany, cautions against underrating the regional manufacturers in threshold countries that are still relatively small today. “Knowledge of a country’s cultural background and the resulting customers’ needs is extremely valuable – I venture to doubt that particularly the Chinese manufacturers will remain as unsuccessful as they are today.” In Kurek’s opinion, autonomous cars as well as all other forms of mobility are only going to catch on if the customer’s benefit has been precisely identified for the respective market. Therefore, he feels that communication and cooperation are the two key topics in designing new products for the growing markets in the threshold countries.

“Talking to the people on the ground and understanding them and their needs takes time that we actually don’t have in the light of climate change,” says Kurek. “But that’s the only way it’s going to work – I wouldn’t let someone else tell me what kind of car I need either.”

Denis Dilba
Author Denis Dilba
She could imagine him as a motivational trainer of a special ops police unit, Denis Dilba’s career counselor told him years ago. Or in a UN think tank: in other words, optimum prerequisites for “doing something with media.” So, the man with an engineering degree gave up his career as an automobile developer, completed the German School of Journalism in Munich, founded Fail Better Media GmbH, and went on to write for important scientific publications and websites.