We see significant potential for growth from next-generation mobility businesses centered on MaaS, which carry people and goods and provide services. We believe that automakers’ future will hinge on whether or not they are able to come up with solutions that meet demand in this market. In this Connections Series report, we leverage Credit Suisse’s global research expertise and provide an update on next-generation mobility with focus on the key element of sharing and market trends in automation technology. We also highlight stocks we like that are geared into this theme.

 Mobility: We see the next-generation mobility business (centered on mobility as a service, or MaaS) as a potential catalyst to break out the global automotive sector from its negative spiral. As value-added in the automotive sector value chain shifts from upstream to downstream and next-generation mobility businesses expand, we expect a polarization in automaker positioning. Commercialization of robotaxis, the epitome of next-generation mobility, is starting to look more realistic.

 Car sharing: The shift from private ownership of automobiles to sharing is looking unavoidable. We expect the car sharing market to expand from ¥12tn in 2020 to ¥29tn in 2030. We see further advances in automation as driving higher penetration of robotaxis, especially in ride sharing. 

Renewed interest in autonomous technologies: We think autonomous driving of Level 3 and higher will be refined for both privately owned vehicles (POVs) and MaaS applications. The technologies are shifting to the mass production and commercialization stages. We expect sales of vehicles with Level 3 autonomy or higher to increase to 42.27mn units (41% of total sales) by 2030.

 Relevant Outperform stocks: Japan: Toyota Motor (7203)/Honda Motor (7267)/Denso (6902)/Hamamatsu Photonics (6965), US: General Motors (GM.N)/Aptiv (APTV.N)/TuSimple (TSP.N), Korea: Hyundai Motor (005380.KS)/Kia (000270.KS), China: NIO (NIO.N)/Xpeng (XPEV.N)/Li Auto (LI.OQ)/Great Wall Motor (2333.HK), India: Maruti Suzuki (MRTI.BO).