Technological trends that redefine the automobile and the risks and opportunities for different industries

The automotive market undergoes a process of transformation driven by four technological trends -connectivity that redefines vehicles as mobile devices, the greater use of alternative fuel vehicles (AFV )), the introduction of autonomous automobiles and shared trips, "says Moody's Investors Service in a new report. These four technology trends will transform the complex ecosystem of manufacturers, suppliers, users and technologies that facilitate personal and business mobility, and the different opportunities and challenges will have different credit implications for each sector.

"The automotive sector accounts for approximately 3% of Moody's globally rated corporate debt, and after integrating other sectors affected by its transformation, such as commodities and technology, the proportion goes to nearly 54% of the debt of qualified companies, "says Robard Williams, Senior Vice President of Moody's." Changes in the way cars are manufactured, used, insured and financed will affect the conditions. in various ways and for various sectors and financial instruments. "

For automobile manufacturers, each of the four trends presents the risks in terms of the additional capital investment required and the uncertainty surrounding the technologies, but also presents opportunities in terms of new and differentiated products.

For example, greater connectivity in vehicles s provides connections with retail offers, media and offers of another type; However, automakers must meet the challenge of meeting customer expectations that such connectivity will be a standard feature, and manufacturers will have to bear the cost to a large extent.

For insurers, connectivity Telematics, through the use of GPS or other onboard diagnostic systems, increases the ability of product and price matching based on actual behavior of the driver. However, there are concerns about confidentiality in the collection and use of data.

Similarly, as participation in the AFV market increases due to a greater concentration of public policies on change. climate change and air quality, utilities could have new opportunities in the face of growing demand for infrastructure to charge electric cars. However, the responsibility of the utilities could also be greater because of the dependence on energy supply and infrastructure.

In the metals and mining sector, demand for some metals used in automotive batteries will increase with the increase in the use of AFV, but there will also be a risk that investments lead to a loss if alternative batteries are developed. different materials

According to Williams, "the change of fuel to electricity in vehicles can affect the growth of petrol demand, although it may at the same time present d & # 39; other sources of revenue to oil companies focused on innovation ". 19659003] On the other hand, for VC and ABS markets, VBCs carry a residual value risk in the resale markets.

Autonomous automobiles offer opportunities in navigation and operating systems, which will broaden their revenue bases, although the risks in terms of computer security and liability for program errors and malfunctions may pose a risk to developers.

Shared trips and their integration into autonomous systems could increase the efficiency of personal mobility and opportunities for technology companies. However, if shared trips reduce the growth of vehicle purchases, this would create difficulties for the manufacturing, financing and insurance sectors that depend on this growth.