Seismic changes that'll be shaking up the car industry

The car industry is facing seismic changes with the rise of electric vehicles, automated driving and car sharing, and adapting to these will eclipse even big mergers such as PSA's purchase of Opel, said executives at the Geneva motor show, which opened today.

This week Peugeot maker PSA agreed to buy loss-making Opel from General Motors, creating Europe's second-biggest car maker behind Volkswagen and sparking speculation of more consolidation.

However, some executives said the deal was unlikely to change the industry landscape on its own, with new competitors in Silicon Valley and China and changing consumer habits set to have a much bigger impact.

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"We are really in a transitionary phase for the industry. There are new competitors on the horizon like Tesla or Chinese ventures," said Herbert Diess, the head of VW's main passenger car division.

"The industry as a whole and brand positioning will change in the next 10 or 15 years and that comes in addition to traditional consolidation," he said.

VW is investing billions of euros in electric vehicles, automated driving and new mobility services, in part as it tries to recover from an emissions test cheating scandal on diesel engines which has hit demand for diesel vehicles. The company is unveiling a fully self-driving concept car at the show.

Karl Schlicht, head of European sales at Toyota, forecasts its European sales will rise 5% this year, compared with an industry expected to grow 1%.

Some industry analysts say an enlarged PSA could actually ease the pressure on rivals if CEO Carlos Tavares uses similar methods to turn around Opel that worked at PSA.

Stefan Bratzel of the Centre of Automotive Management in Bergisch Gladbach, Germany, said it was the potential improvement in profitability at PSA-Opel that posed a bigger challenge to rivals than its sheer size.

"There is no survival of the fattest," he said. "Just because you're big, you do not win the game."

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• This article was originally published in The Times.