Automotive: An industry or an eco-system?
We share this video-bite from McKinsey because it resonates with our experience in the automotive sector. By the way, this video from McKinsey acts as a segue to a very compelling thought-piece they’ve published called, Disruptive trends that will transform the automotive industry. Well worth a read or downloading from their website.
We share the article here because it’s a near perfect assessment of what we are experiencing through a combination of clients in the automotive, ICT and finance sectors, where a triangulation of market forces are encouraging consumers to rethink what mobility and car ownership means to them.
Disruption? You only have to think of the rumours around Apple entering the car market, hot on the heels of a fearless Elon Musk. And Apple of course with even deeper pockets. Or Uber’s market cap starting to cast a shadow over automotive companies. Or the fact that New Delhi (admittedly, not the first city) recently decided to slap controls on cars entering its already congested streets. So how long before the enlightened Millennials take the helm and decide, why allow cars into our cities at all? Well, unless they’re part of a new sharing paradigm. Free up space for public transport that really does function fluidly, and ok, allow commercial vehicles in. In that scenario the public transitions to integrated, seamless, multi-mode transport, fit-for-purpose depending need and occasion. Dovetail driverless or driver-assisted tech and the opportunities to bring in new players from outside of the automotive sector, with new business models, becomes a genuine possibility.
The McKinsey insights are encouraging. It’s not a zero-sum game presented to automotive titans. Expanding markets in Asia and LatAm will ensure demand for personal transport. And the opportunities to make money often in new ways will dramatically expand. The question is who captures the value, why and how? In a world increasingly organised around digital platforms auto brands may need to reposition around a mobile eco-system.
To date large swathes of the public and business have been able to navigate environmental responsibilities, more or less guilt-free. With the new Paris protocols on climate change may come an appetite for new approaches in mobility and a receptiveness to new brand agendas and players. There are young professionals (high earners) this author knows in LA (home of the freeway) that have given up owning a car and rely on Uber for everything from the daily commute, mall and yoga run, to the foray to a movie theatre. Are they anomalies or trend-setters?
For the automotive brands there’s an argument for thinking less about a consumer psychology geared around a product and instead being the driving force in creating a new lifestyle eco-system. Should being part of an integrated mobile lifestyle, a sharing economy and journeys defined by productive time or relaxation, rather than ride and ownership, gradually become the raison d’être? In researching this market, we asked a respondent, ‘What best describes the relationship with your car brand'. They said their ‘running shoes’…the inference being, he’d rather walk or hike most places (and really see the world) or jump on a Boris-bike (aka London's pick up and drop off bicycle network) than drive. His car was becoming a utility. It’s an example of a more holistic attitude to getting around.
Author: Andrew Reid is a director at Shelton Fleming Associates – CX experts in how B2B brands engage senior level audiences, through live experiences and immersive, digital content.
Sign up to Brain Snacks
Thank you for signing up to Brain Snacks
We hope you enjoy Brain Snacks, but if you don’t, you can unsubscribe at any time.