The challenge for the automotive (or should that be mobility) industry could be on two fronts.
We have got used to what was formerly science fiction in every aspect of our lives. In a relatively short period of time people have grown used to the idea of a car talking to you to give directions, and even to park itself. Not too long ago, such things felt as out of reach as James Bond’s jet-pack or Marty McFly’s hoverboard.
Today, a car advert is more likely to boast the fact that the new model will read your text messages or download your music file than how good the ride comfort is or the nifty turning circle. The 2016 Consumer Electronics Show focused on ‘connected car’ as Opemost exciting and relevant technology theme in the world today. More than a third of new cars on sale now are ‘connected’. But I still wouldn’t own one – but I’ll come back to that later.
The average motorist is now driving around in something with more lines of code and computing power than a fighter jet. From rain sensing wipers, automatic lights and on-board parking cameras and sensors, to keyless access and vast infotainment choices, a car is more of a hub than any one single tool. By 2020 all cars will be manufactured with an ‘on-board’ modem and will thus be ‘connected’.
With the ‘Internet of Things’, a vehicle will become a highly connected device and could play a part in future daily life as the smart phone does today. And it’s not far off when self-driving versions will be in the average driveway. The car industry is looking at 2035 for when driverless cars should become commonly available.
The vehicles are unlikely perform in a fully autonomous state at all times, but they will operate as driverless in certain situations and offer high levels of automated driver assistance for the remainder of the time. Levels of connectivity will also extend to scenarios where the cars will communicate with each other and to infrastructure. So one car will alert another of traffic congestion or black-ice on the road ahead, while your car will be checking for a parking space near your destination.
The UK is taking a leading role in Connected and Autonomous Vehicles, with significant funding, a new Government Department (C-CAV) and even a mention in the Queen’s Speech. As well as boosting innovation, connected and autonomous vehicles offer genuine solutions to some very real challenges such as traffic congestion, air quality and providing mobility solutions to those in most need, such as the elderly and those in rural locations.
So, why would I never own one? It’s not the fear of owning such a complex machine – but it is because I would opt for ‘loanership’. Today, that is likely to mean a PCP or PCH agreement that provides affordable access to a car under agreed terms – so I loan not own the car.
The increased levels of connectivity and automation will allow consumers to consider their mobility requirements and this could translate into on-demand transport. The technology is here – the challenge will be to offer compelling new business models that engage with consumers and meet their needs.
In the near future we’ll be able to use an app to call-up a driverless car. This will be revolutionary for public and the environment. With a more limited need for car ownership, it would have huge ramifications for the automobile industry. Against that backdrop, how does the car industry stay relevant and useful in the way it has done for the last 100 years?
Of course, cars will still need to be manufactured, but the biggest change for the car industry could come in its relationship with customers. It might not be the case that all customers will even own or lease a car from a manufacturer – there could be multiple customer types…
Increased connectivity will mean users will generate more data. Just as the mobile phone acts as a window into the lives of consumers, so will the connected car. Soon automobile companies will be able to understand people in new ways to offer more refined services. A 2015 KPMG study stated that connected and autonomous vehicles would generate £51 billion each year by 2030. Of the £51 billion, £16 billion will come from ‘wider impacts’ including monetising data.
In bigger cities, people might rely on a ’mobility provider’ to serve them driverless cars on an ad-hoc basis. Cars could be called-up through an app and charges could be levied either on direct usage or based on use in the previous quarter. Other customers might choose to have exclusive access to, or subscribe to, a self-drive car on a permanent basis, but then pay an additional fee for a driverless car on a city visit or to upgrade to a larger self-drive model for holidays.
In many respects, a car brand could become like a utility-like service to meet the mixed transportation needs of its customers. However, for such a service to fully meet the needs of an expectant public, the technology used to connect with the customer needs to work seamlessly.
In the future, what sort of organisation will be the ‘mobility provider’? Will it be the vehicle manufacturers, financial services organisations or a new breed of disruptive business models? It is likely that the consumers will decide what is relevant to them and what offers the service and value they demand.
Of course, issues associated with data ownership, permissions, portability and governance will need to be resolved so that consumers are comfortable with their services – but this is a challenge that has been overcome by almost every product and technology company over the past 20 years.
That challenge is to strike the balance between a user enjoying a seamless mobility experience, where their vehicle acts intelligently based upon the information held on them, and going too far to leave them feeling ‘creeped out’. Creating and managing a process where only the appropriate amount of user data is shared will be delicate, but entirely possible.
It could also mean light touch identification measures and robust fraud prevention, all of which takes place without endless box-ticking and with just a single verification process that stores user information, and a user experience that makes it as easy to buy a new car as it does to call up a driverless taxi ride.
The challenge for the automotive (or should that be mobility) industry could be on two fronts – developing the next generation of vehicles and turning itself into a customer-centric digital service sector. Each a futuristic proposition that heralds real discontinuity with the past, and leading us back to a new future.