The automotive industry is reportedly relying on outdated engines of M&A and price competitiveness. They seem to be trying to grease the wheels with LLM and AI, but let's stick to the facts. Looking at the current state of affairs, it seems like they're just looking for a 'backdoor' to escape.
First, M&A. M&A in the automotive industry has always been around. It's packaged as a way to reduce costs through economies of scale and enter new markets, but the reality is that 'zombie companies' are just joining forces to barely survive. Have they forgotten the failed example of DaimlerChrysler? Only the size grew, the synergy effect was minimal, and the cultural differences only amplified, eventually leading to disaster. Looking closely at the current M&A deals, they are not much different from then. They talk about investing for the future on the surface, but inside, they are just trying to escape the immediate crisis.
Next is price competitiveness. The story that price cut pressure is intensifying due to competition in the electric vehicle market is now trite. The problem is how 'real' that 'price cut' is. Efforts to reduce costs are of course necessary, but the profits gained from lowering quality or squeezing parts prices eventually go back to the consumer. Tesla lowers prices, and everyone else seems to be following suit, but if you look inside, it's just a 'show'. Ultimately, this can only lead to a decline in brand image and an increase in consumer dissatisfaction in the long run.
Finally, AI. It is an irreversible trend for the automotive industry to introduce AI technology. AI has unlimited potential in various fields such as autonomous driving and improving in-vehicle infotainment systems. However, the way the automotive industry is using AI now is mostly 'showy'. They create chatbots using RAG to automate customer service, and promote that they have improved autonomous driving performance by installing chips equipped with NPU, but the actual performance often falls short of expectations. It's like the smartphone manufacturers 10 years ago who released 'artificial intelligence' speakers and shouted innovation, but in the end, only empty echoes were heard. The real problem is the lack of ability to 'design' AI technology and optimize it for vehicles 'on-device'. It is difficult to secure competitiveness by simply using AI models connected to data centers.
In conclusion, the automotive industry is clinging to 'fake' innovation rather than 'real' innovation. M&A is a struggle for survival, price competitiveness is a bleeding competition, and AI is just a showy technology introduction. If this continues, they may end up being robbed of their 'backdoor' by speculators who smell money. Investors need to make judgments based on facts. Don't be fooled by fancy packaging, and look closely inside.