A month after Morgan Stanley wrote an opus that boosted Tesla's share price, the investment bank is back with another tome that's starting to smell like a conspiracy theory. Because of Tesla and technology firms, it says, the world will only know six automakers within the next 15 to 20 years.
According to chief auto analyst Adam Jonas—the man who predicted "100-percent autonomous [vehicle] penetration" in a "utopian society" within that same time—the U.S. auto industry is unprepared for survival. "We believe the radically changing landscape of autos requires a commensurate change of thinking in Detroit if the domestic OEMs, as we have traditionally known them, are to remain relevant 15 or 20 years from now," Jonas said in a report to Morgan Stanley subscribers, as quoted by the Detroit News. "The world has too many car companies: We cover nearly 30 auto assemblers globally across eight countries. In our opinion, the balance of economic, competitive, and technological forces will ultimately consolidate this figure to five or six players."
Following this theory, we could imagine a few giants falling. PSA Peugeot Citroen, facing declining government subsidies and dropping European sales, isn't any beacon of hope. Geely could wipe out Volvo and absorb the engineering into its own branded cars. General Motors could screw itself into a second bankruptcy.
"There are several auto firms with the vision to make it to that final select group," he said. "Others are more distracted by the issues of the day, working diligently towards the next engineering cycle."
Indeed, Jonas isn't without serious precedent. Six major domestic marques have perished since Oldsmobile died in 2001, as have Maybach and Saab, the latter of which is on partial life support. GM and Chrysler were nearly wiped out in 2009. Certainly, we could see major automakers deleting a few of their sub brands. Lincoln, Scion and Smart are the most obvious, and if we're going for broke, GMC and Buick could die an easy death. Suzuki recently disappeared from the U.S. market and Mitsubishi is no beacon of health, either.
But with car sales growing—last year, automakers sold more than 62.6 million passenger vehicles worldwide—there's more than enough space for the current players to grab a meaty slice. The market has recovered nicely since the recession, and while the auto industry will probably clean house in another 20 years, it's extremely alarmist to think we'll be left with just six brands.
Maybe we should get Jonas a Car and Driver subscription?
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