Home > Analysis > The automotive world in 2018: a certainty of uncertainty

The automotive world in 2018: a certainty of uncertainty

Geopolitical uncertainty at a time of economic buoyancy; political posturing, populism and isolationism during an era of big bloc trade pacts... Welcome to the automotive world of 2018. By Martin Kahl

Well, now we know.

Now we know what a Trump presidency looks like; with China’s emergence from emerging market status, we’re starting to get an idea of what the next economic superpower will look like; and with Russia’s emergence from recession and Putin’s incredible staying power, we now know where China and the US will be looking for competition.

Guide to the automotive world in 2018

Click on the image to
access the full report

However, we still have no idea what Brexit will look like.

Whereas 2017 opened with a sense of uncertainty and almost naivety as to how the year might unfold, 2018 opens with a certainty of uncertainty and a greater sense of preparedness: there will be change, and it will be of a magnitude, but at least we know it’s coming.

Fake news or not, we know that Trump will continue his strategy of shock and awe, particularly in the run-up to November’s US mid-terms – but he won’t be the only president making headlines: elections in Russia in March and Brazil in October will have implications on those two (re-)emerging markets.

2018 opens with a certainty of uncertainty and a greater sense of preparedness: there will be change, and it will be of a magnitude, but at least we know it’s coming

Political instability will continue to affect business confidence in 2018; at the time of writing, Chancellor Merkel’s record-length coalition talks remain inconclusive, leaving Germany without a ruling coalition government since the September election; in the UK, Brexit dominates politics to the detriment of almost anything else, and Prime Minister May remains in post, if not in power, with the weakest-looking UK government in decades; and in Spain, the Catalan independence debate continues.

Business and politics are inextricably intertwined, and there’s no easier business environment than a politically stable one – thus, we can expect an increased risk of global financial market volatility as Brexit and NAFTA talks accelerate during 2018.

With political unrest growing in Iran, Trump has of course tweeted his thoughts on the protests, just days ahead of his deadline to sign the six-monthly presidential waiver on economic sanctions under the terms of the 2015 nuclear deal. Preserving the deal certainly benefits business – and the global automotive industry has thoroughly enjoyed its return to Iran – but waiving sanctions looks like waving supportively, and popular protest against the Iranian government gives Trump the easiest way out of “one of the worst… transactions the United States has ever entered into”.

There’s no easier business environment than a politically stable one – thus, we can expect an increased risk of global financial market volatility as Brexit and NAFTA talks accelerate during 2018

Iran has long been on Trump’s hit-list, along with North Korea. But Trump missed a trick – whilst he was distracted by the size of Kim Jong-un’s button, North Korea began an apparent rapprochement strategy with South Korea, a move intended no doubt to divide Kim’s enemies. Whatever happens, it’s creating political and economic unrest in a region where global businesses are keen to see calm.

But what else can we expect, particularly where the automotive industry is concerned?

With OEMs and suppliers developing their strategies around variations of acronyms encompassing Automation, Connectivity, Electrification and Sharing, we’re getting the first hints of what the automotive industry of the future might look like, and where investment will be poured in 2018.

Regulators are (slowly) becoming more adept at accommodating new technologies and new business models, but there’s still a massive divide; for this audience, it’s fair to say that the relevance of the Uber situation in London is less about the definition of a taxi, and more about the difficulties of launching something new in a heavily regulated business environment – and we’ll no doubt hear much more about this over the next 12 months.

Geopolitical uncertainty at a time of economic buoyancy; political posturing, populism and isolationism during an era of big bloc trade pacts…Anxious, puzzling and fascinating – welcome to the automotive world of 2018

Despite the hype surrounding Bitcoin late last year, the potential for cryptocurrency and blockchain technology remains untapped, and it clearly has a place in the connected car of the future – just as much for private car owners as for shared mobility services and the growing number of truckers using freight aggregators. As connectivity increases, expect to see the impact of US internet laws and Europe’s GDPR (General Data Protection Regulation), particularly as tighter regulations meet faster speeds in the form of the first 5G roll-outs. Other significant acronyms for 2018 include the implementation of ELD (Electronic Logging Devices) in the US, the extension of truck MAUT to Germany’s main roads, and September’s long-awaited introduction of WLTP (Worldwide harmonized Light vehicles Test Procedure).

As EVs gain in popularity, and oil prices continue their slow, steady rise, diesel’s demise intensifies, with another sharp drop in India, a remarkable collapse in France, and a fascinating debate in Germany on whether to subsidise EVs and/or penalise diesel. Meanwhile, in China, the promotion of clean vehicle technology now includes ordering the cessation of production of ‘dirty’ vehicles, with over 550 models blacklisted at the end of 2017, among them certain vehicles made locally by global OEMs.

It’s been fascinating compiling the 2018 edition of Automotive World’s annual ‘Guide to the automotive world in…’. This guide provides insight into the major automotive sectors and regions, acting as a valuable addition to the automotive industry stakeholder’s toolkit. Geopolitical uncertainty at a time of economic buoyancy; political posturing, populism and isolationism during an era of big bloc trade pacts…Anxious, puzzling and fascinating – welcome to the automotive world of 2018.

Martin Kahl is Editor, Automotive World

Guide to the automotive world in 2018‘ is available exclusively to Automotive World subscribers