Philipp Hildebrand
BlackRock Vice Chairman
The world’s automotive industry faces challenges of tougher regulation, shifting consumer demand and technological disruption. We detail the big industry trends – from electric vehicles to the road to autonomous vehicles – and their implications across industries.
We see two big changes happening in parallel in the auto industry:
- The spread of advanced driver assistance systems (ADAS) potentially paving the way for the proliferation of self-driving vehicles.
- The rise of electric vehicles (EVs).
Our bottom line is that investors need to be selective as this evolution plays out, since the race to the future of vehicles will create significant dispersion between the winners and losers.
For example, semiconductor and software makers are set to be some of the biggest beneficiaries of the rising digital content of vehicles, we believe. These higher-margin players are muscling in on traditional auto players, which are less cash rich due to slimmer margins. See the chart below.
Where the money is
Profit and cost breakdown of selected industries, 2016
Sources: BlackRock Investment Institute, MSCI and Bloomberg, April 2017.
Notes: Automobile and auto components companies are constituents of the MSCI ACWI Automobiles and Components Index (USD). Technology hardware, software and services, and semiconductor companies are constituents of the MSCI World Information Technology Index (USD). The aggregate is based on latest available full-year data. Profit is based on earnings before interest and taxes.
Key highlights
- We see rapid adoption of advanced digital safety features causing significant industry disruption in the coming five years, even though we do not expect to see fully autonomous vehicles widely adopted any time soon. We see the EV share of total vehicle sales ramping up gradually as costs fall and charging infrastructure improves, but do not see this trend starting to shake up the industry until beyond 2020. Overall, we expect the path of travel to have a cumulative, rather than sudden, impact.
- We see semiconductor and software providers as primary beneficiaries of the rising digital content in vehicles, although automakers and part suppliers are working aggressively to catch up. Adapting to rapid technology changes while keeping prices competitive poses major challenges for both the traditional vehicle industry and technology sector newcomers.
- Today’s luxury value-added features are likely to become tomorrow’s commodities. We believe investors may benefit from examining the supply chains of the industries related to both the production and use of vehicles. Lastly, we detail how the evolution of vehicles will have profound implications on industries well beyond vehicles and technology, including real estate and financial services.
Hannah Gray
Natural Resources team, BlackRock Fundamental Active Equity
Tony Kim
Global Technology team, BlackRock Fundamental Active Equity
Charlie Lilford
Natural Resources team, BlackRock Fundamental Active Equity
Andrew Wright
Basic Value team, BlackRock Fundamental Active Equity
Continue lendo nossas perspectivas
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