Are traditional automakers at risk of going the way of the dinosaur?

When buying a new car, there are currently an established group of automakers from which to make a selection.

Most of these companies have been creating cars, trucks and other vehicles for decades, building both an established reputation and significant amount of experience when it comes to construction and maintenance. However, could they soon go the way of the dinosaur thanks to the ambitions of rapidly-growing technology companies?

It might not be long before fleet managers are purchasing new vehicles from silicon valley, rather than the established giants in the US, Europe and Japan.

Technology companies growing ambitions

For the past few years, technology-based companies like Google have started to make moves in the automotive space, developing and testing self-driving vehicle technology, often with favourable results.

In fact, in 2012, Google's self driving cars managed to transit around 484,000 km without a single crash. Since then, crashes have usually resulted from other drivers inattention. It's clear that the experience gained from technology development is paying off when moving into automobiles.

While nothing has been formally announced, Apple are also reportedly experimenting with vehicles - having taken on several employees with auto experience. Of course, it's companies like Google that pose the most imminent threat to the large automakers.

The future of traditional automakers

However, a new report from research firm KPMG has found that although there could be impacts over the long term, established automakers are set to prosper over the next decade.

In a new survey, 200 automotive executives shared their views on the changing vehicle landscape, and what was likely to happen in the near future.

A substantial 34 per cent of respondents stated that the established premium original equipment manufacturer (OEM) market is "set to dominate up to 2025", while 48 believe the situation is "somewhat likely". At a slightly lower percentage, 32 per cent said that mass market OEMs are extremely likely to dominate.

The report explained that although auto executives do not expect major disruption from technology companies over the next five years, the industry is feeling pressure from consumer demand for new in-car technologies.

"Consumers are becoming increasingly tech-savvy creating a completely new mobility culture where consumers not only expect, but demand, new and innovative services," said Dieter Becker, KPMG's Global Head of Automotive.

Many respondents noted that the established automakers will progress alone rather than partner with other makers for success in the changing landscape, although emerging market OEMs will likely favour strong alliances.


So, even as technology companies start to make moves in the auto industry, many executives don't appear to be fazed - at least in the near future.

However, any vehicles from these technology companies could offer features worthy of consideration, something that could light a fire under many established automakers.