L.A. Auto Show: Futurist predicts tech will disrupt auto industry

L.A. Auto Show: Futurist predicts tech will disrupt auto industry
Peter Schwartz speaks at the L.A. Auto Show. (Paresh Dave / Los Angeles Times)

Automakers face a bleak future if they don't make aggressive bets about the future of cars, according to Peter Schwartz, a renowned business strategy consultant.

"If they don't adapt, they'll just be hardware suppliers to a software industry," Schwartz said Tuesday to kick off the Connected Car Expo at this week's L.A. Auto Show.

The idea of cars being connected to the Internet, becoming smart enough to drive themselves and entertain consumers, doesn't just mean loading them up with more bells and whistles, he said.

"The very business model -- who are the winners and loser -- is up for change," Schwartz said.

About 50% of drivers want smarter cars, whether for safety or entertainment, Schwartz said, citing a McKinsey & Co. survey.

In the worst-case scenario for traditional automakers, digital invaders like the Googles and Apples of Silicon Valley produce a fragmented market that slows adoption of connected cars and leaves consumers frustrated.

The best-case scenario has automakers matching the story of IBM, which has successfully adapted its culture to changes in the technology industry and remains a blue-chip stock.

Schwartz said he was "enthusiastic" that either the automakers or digital invaders would win out and the ideal of a connected car does take off.  But "if you're a business decision-maker, you have to think about all the scenarios," he warned.

Twitter: @peard33