Aston Martin CEO Expects Autonomous Tech Costs To Cause More Mergers

Aston Martin chief executive Andy Palmer believes many car manufacturers will be forced to merge in order to develop connected and autonomous vehicles.

During the recent Society of Motor Manufacturers and Traders’ Connected conference, Palmer said that mergers and acquisitions will become increasingly common throughout the industry.

“We’re all developing similar technology costing billions and that’s nonsense. I think it is inevitable car companies will come together through mergers and acquisitions. The requirements will be too much for many of the firms involved,” Palmer said.

“The business model of spending $1bn to develop a car and then have to pile it high and sell it cheap – discounting – in order to keep factories turning and maintain economies of scale is broken.”

The landscape is changing rapidly

Palmer foresees the industry eventually being dominated by just two or three “mega-companies”, very much like how Boeing and Airbus dominate the commercial airline industry. Most analysts cite 14 conglomerates as being at the center of the automotive industry at present, including BMW, Daimler, Ford, Toyota, General Motors, FCA, Tata and Geely, Autocar reports.

Aston Martin will also have to form partnerships despite looking to establish its own technology advances partly through the launch of the Lagonda brand. Palmer didn’t detail any hook-ups the car manufacturer is considering, but believes the brand’s small size will actually help it in the age of autonomous vehicles.

“If something becomes easy to access or create it becomes a commodity, and for mainstream car makers that is a very real risk, but for car companies that don’t have to sell one more car to help a parent firm’s bottom line, there are opportunities.

“Independent, luxury car makers like us can thrive by fighting against commoditization and focusing on adding to our mythology,” Palmer said.

Interestingly, Palmer revealed that Aston Martin and Lagonda will skip Level 3 autonomy and instead jump directly from Level 2 to Level 4. The company believes this is the best way forward, as launching Level 3 self-driving vehicles “is reckless,” according to Palmer.

more photos...
Aston Martin Vantage Gets Up To 691 HP Thanks To McChip-DKR

The Stage 3 Vantage could probably keep up with a DBS Superleggera for considerably less money.

Apple Patents Steer-By-Wire System For Autonomous Cars

While building its own autonomous vehicle seems unlikely, Apple is very interested in developing systems that’ll be used by other manufacturers.

2020 Hyundai Accent Gains New Engine, But Loses Power

While the 2020 Accent is down on power, the model is more fuel-efficient than its predecessor.

Facelifted Mazda2 Bows In Japan With Subtle Styling Changes

The updated hatchback features new fascias, improved seats and a returned suspension.

BMW Appoints Oliver Zipse As Its New Chairman

The 55-year old will succeed Harald Krueger at BMW’s top spot from August 16.

2020 Corvette C8 Interior Makes An Early Appearance In All Its Glory

The Corvette C8 is not out just yet, but an official image of the interior has found its way online.

Toyota Unveils Custom Electric Shuttle For 2020 Tokyo Olympics

Toyota’s new Accessible People Mover has been designed to transport athletes, staff and visitors at the 2020 Olympic Games.

This Insane Ford F-150 Raptor Study Makes All Others Seem Bland

With a V8 sticking out of the hood, this Ford F-150 Raptor is far from normal.

McLaren 600LT Coupe By MSO Is One Of The Last Examples To Leave Woking

Commissioned by McLaren London to celebrate its 1,000th delivery, it is loaded with all the extras you might think of.

Ferrari 812 Superfast Spider Tipped To Debut In September

Unlike the 599-based SA Aperta that preceded it, the open-top 812 won’t be a (very) limited run.