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Automakers Prepping for a Future Where Fewer People Buy Cars

It may build cars, but Ford wants you to stop thinking of it as an automaker.

It may build cars, but Ford wants you to stop thinking of it as an automaker. Going forward, it plans to put more emphasis on what can be called “mobility solutions.”

It will still sell you an F-150 pickup, or an Explorer SUV. But it’s also getting into businesses like car- and ride-sharing, and putting more emphasis on high-tech services like SYNC.

“Our plan is to quickly become part of the growing transportation services market, which already accounts for $5.4 trillion in annual revenue,” or nearly twice as much as the global auto industry brings in each year, noted Ford CEO Mark Fields as he announced the creation of the new Ford Smart Mobility LLC.

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Since just the beginning of the year, Ford has announced a variety of new ventures outside its traditional lines of business. It’s even launched a partnership with Amazon that will give motorists in-car access to the high-tech company’s voice assistant, Alexa. That will let a motorist remotely control their home’s thermostat and lights or open the garage door.

Ford is by no means alone. Since the beginning of the year, General Motors has launched the Maven car-sharing service and acquired the bankrupt Sidecar ride-sharing service. It’s also invested $500 million into Lyft, second only to Uber in the fast-growing world of ride-sharing.

The auto industry, GM CEO Mary Barra said during the Consumer Electronics Show last January, “will change more in the next five to 10 years than it has in the last 50.”

And that led GM to announce another major acquisition last Friday, the purchase of Cruise Automation, a California-based start-up focusing on the development of autonomous vehicles.

By the beginning of the coming decade, the first fully autonomous vehicles are expected to hit the road. The National Highway Traffic Safety Administration recently said it would relax rules to permit faster development of a technology that it believes will yield a sharp reduction in highway fatalities, while also squeezing more vehicles efficiently onto existing roads.

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“Fully autonomous vehicles can bring our customers enormous benefits in terms of greater convenience, lower cost and improved safety for their daily mobility needs,” GM President Dan Ammann said in a statement announcing the Cruise Automation acquisition.

In a newly revised forecast, IHS Automotive predicts Americans will buy about 300,000 autonomous vehicles in 2025, a figure that will grow to 11 million a decade later. And by 2035, as many as 10 million cars a year will hit the road requiring no driver at all — in fact, they’ll likely have none of the controls found in today’s vehicle: no steering wheel or pedals.

That could be the biggest game-changer of all, some analysts believe. For one thing, it is encouraging new entrants into the auto industry for the first time in decades. Google has taken a lead in the development of driverless technology and the question is whether it will build its own cars or seek out partners. Secretive Apple also is believed to be working on autonomous technology.

Some analysts believe that the broader impact will be a sharp decline in new vehicle sales. Among other things, this would lower the operating costs for services like Lyft and Uber to the point where it would be easier to and cheaper to call for a ride than to keep a car parked in the driveway.

Several studies released over the past month conflict over the long-term impact of autonomous vehicles and other alternative mobility services. One, by sales website Kelley Blue Book, contends the impact on car sales will be minimal. A survey of 1,900 Americans found 74 percent saying they’d prefer to own a vehicle, the report suggesting car- and ride-sharing services will largely replace taxis and daily rental companies.

A separate study by AAA found the majority of Americans remain skeptical about autonomous vehicles.

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But a third report, by the Boston Consulting Group, suggested that such concerns will fade over time. The study predicted that ride-sharing, for example, will see a five-fold growth in the number of people using such services over just the next five years.

It’s far from clear how that will affect traditional automakers — and that’s why they’re rushing to enter non-traditional businesses.

“Whatever happens, we want to be prepared to respond,” said GM global product development director Mark Reuss, in a recent interview. GM has set up several new units of its own to focus on alternatives ranging from electric cars to autonomous vehicles and ride-sharing services.

Echoes Ford Chairman Bill Ford, “Ensuring the freedom of mobility requires us to continually look beyond the needs of today and interpret what mobility will mean to future generations.”