"The American auto industry will face a death spiral of epic proportions."

Electric self-driving "transport-as-a-service" will obliterate car dealerships and sales of traditional gasoline-powered cars

#Future

Sun, May 28th, 2017 11:00 by capnasty NEWS

Greentech Media brings to attention a report by analyst firm RethinkX which predicts the death spiral of the American auto industry. Reportedly, "transport-as-a-service" (TaaS) will be able to provide cheap, reliable transportation summoned easily with a smartphone, rendering the need to own an expensive car obsolete.

For automakers, that could mean a severe death spiral, similar to the one that some predict for utilities. “Individual vehicle ownership, especially of internal combustion engine vehicles, will enter a vicious cycle of increasing costs, decreasing convenience and diminishing quality of service,” the authors write.

Car companies that continue to focus on manufacturing traditional gasoline-powered cars for traditional ownership models, as well as auto dealers and insurance companies, could face “total disruption” and “almost complete destruction.”

All car companies are well aware of these trends with electric and self-driving cars, but most are probably not expecting this kind of disruptive intensity. The report predicts sales of gasoline-powered cars, the value of used gasoline-powered cars, and car dealerships will all be utterly destroyed.

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