Major automakers are pushing to make their mark on the next trend in vehicle technology, and these top car stocks are the ones to watch out for in the coming years…
When Toyota unveiled the very first mass-produced self-parking system for its Japanese market Prius vehicles back in 2004, the technology stirred little interest outside of the automobile world.
Dubbed the Intelligent Park Assist System (IPAS), it was able to parallel park via an onboard computer and multiple cameras and sensors to maneuver a vehicle without human assistance.
When their flagship Lexus LS luxury sedan became the first vehicle to offer the same system in the US in 2006 however, the public finally started to take notice.
Over the next few years, BMW and Ford followed suit and offered cars of their own with self-parking systems.
The idea that a car could be parked sans driver was truly revolutionary, and so the race to take the technology further was unofficially kicked off.
Next step? Cars that could drive by themselves.
Even though the first incarnation of driverless technology was conceived in the 1980’s by Mercedes-Benz, at the time it was merely an experimental project without any intention of commercialization.
But in the last couple years, tech firms like Google and several large automakers have given us glimpses of the bigger picture, and are beginning to take the “autonomous driving” concept very seriously.
The potential advantages over conventional driving are vast:
- Safety – fewer accidents with computers boasting faster reaction times than humans and eliminating distractions
- Road Capacity – better traffic efficiency and flow; higher speed limits due to automation
- Equal Opportunity – vehicles can be occupied regardless of person’s impairment, disability or age
- Efficiency – everything from parking further or in tighter spots, to handling mundane trips, eliminating police speed and safety checkpoints, fuel consumption and the reduction in road signs and car insurance
Of course, these benefits would only be effective if driverless technology was adopted en masse. Having just a handful of these cars on the road likely won’t have much of an impact.
Nevertheless, there needs to be a starting point…and gradually, we’re seeing cities across the globe beginning to adopt the movement as we speak.
Over in Europe, select cities are planning to set up large-scale cybernetic transportation systems, including France, Italy and Belgium.
Israel is preparing to launch fully autonomous patrol vehicles to monitor its borders against intruders.
And in the US, laws have already been passed by 3 states to precisely allow autonomous vehicles on the roads: Nevada, Florida, and California.
So with the public interest growing, which companies are poised to capitalize?
Top Car Stocks to Consider:
The first manufacturer out of the gate is once again Daimler AG-owned Mercedes-Benz (ETR:DAI). It’s 2014 S-Class has an option called the “Stop & Go Pilot” that’s currently available only in Europe.
According to Forbes, the system “allows the car to drive itself in gridlock, with the driver’s hands off the wheel. It can come to a full stop if necessary and accelerate back up to a preset speed while maintaining a set distance from the vehicle ahead. It can also steer itself to stay in the lane. But the feature only works at low speeds. At higher speeds, the system monitors the driver to make sure hands stay on the wheel.”
Being a leading luxury auto manufacturer, Mercedes has invested heavily into research and is pining to become a frontrunner in this new space.
A close competitor is fellow German automaker BMW (ETR:BMW). Its new i-Series will feature an i3 model in 2014 that will be considered partially autonomous.
The i3 will have a “traffic-jam” system that’ll allow the car to accelerate, decelerate, and steer by itself at speeds of up to 25 miles per hour—as long as the driver leaves a hand on the wheel.
Being the best selling upper market brand (narrowly ahead of Mercedes for now), the success of the i3 could solidify its position at the top.
But while both Mercedes and BMW are looking to change the practice of commuting one vehicle at a time, Volvo is taking an entirely different approach.
In the coming year, Swedish car manufacturer Volvo, a subsidiary of Geely Automobile Holdings Ltd. (SEHK:0175), will be implementing a large-scale autonomous driving program in the Swedish city of Gotehenburg where 100 driverless cars will be on the road at once.
The goal is to simulate normal everyday road conditions, with pedestrians and traffic all about.
While Volvo’s “Drive Me” self-driving versions of their new XC90 SUV won’t be commercially available until 2017, this campaign could boost a renewed interest in the beleaguered company over the coming year as global sales have remained flat year over year and continues to decline significantly in North America.
Volvo’s project is so far the closest to full automation technology, as the others still require some human interaction.
But whether you like the concept of self-driving vehicles or not, one thing is for certain: investors who play their cards right can position themselves for explosive growth as the technological race heats up.
ABI Research forecasts that truly self-driving cars won’t become a reality until around 2020. By 2032, 10 million such new cars could be rolling out on to America’s highways every single year.
The Institute of Electrical and Electronics Engineers (IEEE) have estimated that up to 75% of all vehicles will be autonomous by 2040.
As ominous as that may seem, a future with no human drivers is not that far away.
For investors with medium to long time horizons, this is definitely an industry to keep an eye on.
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