The automotive industry is at the beginning of seismic change. PWC predicts that by 2030 the car industry will have split in two, with at least 30% of the European market being in standard models destined to become shared vehicles sold to mobility providers. The other part of the market would become increasingly specialised and customisable models. So what’s driving this change and how are car makers responding?
Younger consumers value experiences more than ownership and of course comfortable with the shared economy through services like Airbnb, WeWork and the concept of crowdfunding. It makes perfect sense for this audience to share and rent cars when they need them. It also gives more flexibility, as people can choose the kind of vehicle they need for a particular purpose – a city run-around for day-to-day chores, a people carrier to ferry a bunch of friends for a day out, or a 4x4 for a week in the countryside.
But how will this generation, used to being able to personalise and customise services to suit their lives, deal with driving the standard models they’ve hired through mobility suppliers? They’ll simply plug and play, connecting their smartphone with the vehicle in order to access not only their music and social media, but also, other preferred settings for driving and controlling things like the temperature in the cabin. Familiar tech giants like Google have a massive advantage here, already having an enormous customer base familiar with their interfaces. Their Android Auto is currently available in 36 countries and includes Google Assistant and a Google Maps navigation system. And though they’re not there yet, Google is currently working with car manufacturers so they will eventually be able to access vehicle settings too.
Strong partnerships with mobility providers may be the way forward for manufacturers. Volkswagen has teamed up with Zipcar to provide the largest shared electric fleet in the UK, utilising the e-Golf and likely to have wide appeal, particularly for drivers concerned about pollution in cities like London. Zipcar’s general manager Jonathan Hampson said “Working with Volkswagen we have made EV driving more affordable and accessible than ever before.”
But perhaps partnerships won’t be enough. Becoming suppliers only, manufacturers would lose their contact with customers who might have less and less loyalty towards their brand, having allegiance instead to the mobility company supplying their transport solutions, which could well be the likes of Google, other tech giants and new players. Anticipating this, Volkswagen has also moved into on-demand transport services with their ride-sharing company MOIA.
Some auto companies are already completely rebranding as mobility companies. In 2017 Ford kickstarted their marketing of the company as a mobility provider in 2017, with a Superbowl ad promoting ride-sharing, bike-sharing and still-in-development self-driving cars.
In the same year Toyota announced a global repositioning called ‘Start your impossible’. Speaking to The Guardian, Jim Lentz, chief-executive of Toyota North America, told the Guardian. “We still are about making cars and trucks but other forms of mobility as well – not limiting ourselves to just thinking about traditional passenger cars, SUVs and trucks.” Instead they’re broadening out to consider short journeys in urban areas, including vehicles for the car-sharing market. In 2020 they plan to showcase a network of connected fuel cell buses, an autonomous vehicle and a redesigned taxi fleet. There may even be a flying car, as the company filed a patent for a ‘dual mode vehicle’ in 2018.
Similarly, Europcar rebranded to Europcar Mobility Group in 2018, transforming from car rental specialist to mobility solution provider. “The traditional model of owning a car doesn’t fit-for-all anymore,” Caroline Parot, Europcar Mobility Group CEO commented. “Furthermore, thanks to technology and digital innovation, there are now many other smart and cost-effective solutions to get from one point to another, and that’s what really matters for people.” Europcar had diversified in recent years by buying up a number of companies offering additional services such as car-sharing and scooter-sharing.
And later this year, Daimler Financial Services will rebrand to Daimler Mobility, after seeing growth in demand for its mobility services including its car-sharing offering car2go, and Moovel, an app to find travel options and book tickets and services in Germany and the US.
So will car manufacturers be able to compete with tech and mobility companies who start from scratch and are unfettered by the legacy of their past? Is the next Uber, as yet unknown, just around the corner, or have manufacturers given themselves enough time to see off the disruptors? Only time will tell, but one thing’s for certain – the whole market is changing, and at the moment, everything’s up for grabs.