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Autonomous Cars Race Narrows on Doubts about Clear Path to Profit

February 12, 2018

Automobile giants BMW and Daimler are considered to be the world’s renowned luxury automobile manufacturers and have recently announced that they are joining an alliance with different suppliers. According to sources, both BMW and Daimler have made these mergers in order take advantage of a larger pool of resources in order to develop a self-driving car that is perfect from every aspect.  However, there is another motive behind these deals as experts state that self-automated cars might not produce the expected profits due to the staggering initial investment rush.

Due to this fact many car makers are foregoing their respective outright ownership of future self-driving cars as the engineering challenges of developing this type of vehicle are deterring the growth of this industry. Although the autonomous vehicles constitute a vast market, people are considering the chances that the return on investments might not be as lucrative as people previously believed. Hundreds of companies including Google and Uber are preparing for the chances that the autonomous industry does not live up to its expectations. Experts have stated that only fifteen percent of the vehicles in Europe will include self-driving cars, this means that there is no doubt that many companies out there will not make their forecasted profits.

Last July was the first time an automobile giant pulled the plug on its development of an autonomous car in order to direct their resources towards building a platform for self-driving technology. After abandoning its solo development of self-driving cars, BMW integrated with Intel to develop this platform for autonomous vehicles. What everyone has to realize is that most of the car manufacturers have invested millions of dollars towards developing autonomous vehicles and the challenges developing this type of vehicle is discouraging these companies from further investment. This industry witnessed one of the highest investment ratios as every company wanted to capitalize on the chance of developing an autonomous vehicle.

Will This Integration Change Anything?

However, BMW’s integration with suppliers and Daimler is a step in the right direction as it has been hailed by car manufacturers all around the world. Each company is currently independently investing all of their resources towards the development of an autonomous vehicle but to no avail. If other companies follow BMW and Daimler’s initiative it is very likely that these vehicles are developed at an expedited rate. Instead of independently using up resources, now companies can pool their resources in order to develop this autonomous vehicle. Many companies have already followed suit and are integrating with different companies in order to share the burden. These integrations and mergers are considered to be the current solution to the autonomous vehicle industry and will reduce the number of years that it will take to make this dream become a reality.

This industry is enabling technology and should not be considered to be a business case, even though it is one of the most financially promising markets. Only time can tell how these integrations expedite the growth of the autonomous industry.

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