Aston Martin CEO Andy Palmer thinks the automotive industry as we know it is in for some serious disruption with the advent of self-driving cars. The top executive spoke at the Society of Motor Manufacturers and Traders’ Connected conference on Thursday and said self-driving cars will result in numerous automaker mergers.
Autocar reported on Palmer's comments on Thursday, in which the executive echoed previous calls from the late Fiat Chrysler CEO, Sergio Marchionne. Palmer said numerous companies all spending billions of dollars on identical technology, and then building lots of them at discounted prices to ensure economies of scale is a "broken" way of doing business. Marchionne previously called for mergers to reduce investment in future technologies and made similar comments about the industry's race to the bottom with respect to autonomous cars and electrification.
Aston Martin CEO Andy Palmer (left) and Red Bull Racing Team Principal Christian Horner
We've already begun to see Palmer's vision play out. Daimler and BMW, longtime rivals, have talked about collaborating on self-driving cars and have a joint mobility services company. VW and Ford announced the two will work together on commercial vehicles, and perhaps self-driving cars. FCA and French automaker PSA are also rumored to be exploring collaboration on electric vehicles. The rumors follow reports that FCA and PSA have also spoken about a potential merger between the two companies.
On the topic of self-driving cars, Palmer also said any automaker that plans to launch a Level 3 autonomous vehicle is playing a risky game. Level 3 self-driving cars require humans to take over control in various instances, which Palmer sees as dangerous. Aston Martin and Lagonda will skip to Level 4 and Level 5 self-driving cars, which do not require human input.
Palmer also echoed past arguments, saying he sees top-echelon luxury brands surviving whatever changes come. He called mass-market brands commodities, while Aston Martin and Lagonda won't need to answer to a parent automaker. Along the way through the disruption, the Aston Martin CEO predicted more newcomers will come and go. Some will fail, some will be bought out, but the final reality will be a much more intertwined auto industry, per Palmer's vision.