5 Predictions For The Auto Industry In 2025

With so many step-function changes in automotive hitting the Valley of Disappointment, here are five ...

[+] (5) predictions that suggest how the coming year will unfold. In the year 2000, Visteon was launched from the electrical division of Ford, and part of the visioning exercise of this burgeoning, multibillion dollar corporation was to predict what radical changes would impact the auto industry in the year 2025. These neophytes to the Supply Base imagined many technological innovations that have either come to fruition (e.



g., remote start) or have flirted with reality (e.g.

, autonomous driving, flying cars ). Like many companies, imaging such a future helps to guide strategic planning and investments. And after 9/11, the Great Recession, COVID, and wars in multiple regions, 2025 arrives in just a few days.

Nevertheless, the necessity of predicting the future is still a required exercise, so here are five (5) predictions for the auto industry in 2025. Software recalls continue to grow at an alarming rate while software-related content shows no signs ..

. [+] of slowing. #1 Software Recall Spends Will Double Again The curve on software recalls is going the wrong direction: exponentially upwards.

In the past year, the number of vehicles affected with a software-related recall jumped to 42% from 13% in 2023. I alone have experienced seven (7) trips to the dealership in 2024 for software-related glitches. A recent article where the Detroit Free Press interviewed Todd Warren, a professor at Northwestern University and Founding Advisor for Envorso, only an estimated 13% of software-related recalls can be addressed via Over-The-Air (OTA) updates.

Although that cost-savings capability should increase slightly in 2025, several automakers have paused architectural issues that would permit OTA since they were tied to Electric Vehicle (EV) launches that were delayed due to softening market demand for EVs. Some automakers and suppliers have quietly attempted to address these quality issues, but escalating content and cost pressures have caused recalls and non-safety repairs to skyrocket in an impactful way. The escalating price of this inattention to quality will cause the second prediction (below).

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[+] needs to find an economical way forward with Software-Defined Vehicle (Photo by Anna Moneymaker) #2: GM Or Ford: Either M&A Or Alliance In Near Future In the world of “Do It Yourself” (DIY) there are always two major assumptions: 1) having or acquiring the know-how to get ‘er done, and 2) it’ll be economically advantageous to proceed without help. Neither are true for General Motors or Ford. Both have repeatedly attempted to solve the quandary of Software-Defined Vehicles that permit OTA and cloud-based offerings with a brand new, high-tech architecture via acquiring executives or high-priced talent from Silicon Valley, but have failed and postponed vehicle launches for years.

The price of DIY has become enormous – it’s essentially redesigning the entire electrical system from the ground-up – and automakers can no longer wait for this enabler to reflashing software over-the-air. “Collaboration is the only way forward,” states Dr. Ludmilla Derr, the Managing Director of Elite Expert Conferences and facilitator of several development alliances.

“In this market, companies need to be cautious where to invest, and only having to fund half of the investment is even better. Not to mention, such opportunities to collaborate frequently create unforeseen synergies.” The prediction of mergers, acquisitions or alliances of/with these two iconic brands seems bold prima fascia, but the industry has already seen Volkswagen invest $5.

8B USD in a joint venture with Rivian for its software-defined architecture, and recently Honda and Nissan have discussed an alliance for sharing software and electrification components to decrease development costs. Both Ford and GM need to rethink DIY and find a willing co-investor. Voice has already become a steering-wheel mainstay, but adaptation of voice interfaces within the .

.. [+] vehicle will expand further.

#3: Voice Assistants Will Become More Prominent High-resolution screens have become more pervasive and extended in the past few years (see “ A Bug To The Light: The Attraction To Touchscreens in Cars ”), and market predictions expect further expansion. Couple that with the delays of autonomy, and two automaker-needs emerge: 1) the need to differentiate in technology and 2) the need to mitigate driver inattention. The solution: a personalized voice assistant (i.

e., not Siri, not Alexa). “Users are overwhelmed,” suggests Nils Schanz, Executive Vice President of Product and Technology at Cerence AI.

“Cognitive overload and driver distraction are just too high, and this is what [automakers] are recognizing. They want to bring back balance where end users actually use the systems, and so we’re seeing voice assistants gaining more prominence.” Not only will this gain popularity due to customization, but also Artificial Intelligence will enable a more seamless integration into the interactions, rather than the historical hard-button-followed-by-structured-voice-commands.

With places like Argentina increasing in technological talent, automakers will look to leverage ...

[+] cost-competitive labor. #4: South American Tech Centers Will Increase Automotive has for many decades struggled with profit margins and, in the midst of needing to trim costs while increasing content, has sought geographies with lower-cost laborers. Some of this motivation was the impetus for the North American Free Trade Agreement (NAFTA, 1992) — which caused both manufacturing and development to move to Mexico – an expected growth to $1B USD in India in 2025 from $128M USD in 1990, and a 15x growth in China since 2000.

However, the pandemic and recent political strife has caused automakers to rethink their development distribution around the globe. The U.S.

Congress voted on a bill that will “...

limit U.S. investments in artificial intelligence and other technologies sectors in China .

..” that could threaten safety and security.

” Additionally, in the last decade, labor in these areas has risen significantly (e.g., India rose 55% from 2010 to 2021).

Therein, North American companies will begin moving to newer, economically-driven South American areas since there are fewer political restrictions and/or time zone coordination issues. For example, Argentia alone has 1,200 active startups – which is a 25% increase from just 2020, and Alcor reports a rise to 7.1M tech positions by 2034, which equates to a 8.

3% CAGR over the next decade. Online or hybrid work environments were required over the past few years, but onsite employment will ..

. [+] rise in 2025. #5: In-Person Will Reemerge 82% of conference attendees prefer in-person experiences , and 75% of exhibitors plan to keep or grow their marketing budget.

83% of Chief Executive Officers (CEOs) anticipate a full-time return-to-office within the next three years, which increased significantly from 64% in 2023. The hybrid experience has grown wearisome since the binge-Zoom years of the pandemic. The actual number of personnel that return to the office full-time will be less than these numbers since there’s a noted gap in employee expectations (e.

g., 86% of employees want 2+ days from home per week), but the number of onsite workers will assuredly rise in 2025..