New trends are disrupting the automotive industry. A case for transformation.
Today, the automotive industry is facing a powerful new shaping force. The rapid technological change fueled by trends like digitization, sharing economy and new group of customers is challenging the status quo of the traditional auto industry.
Digitization is forcing automotive OEMs and dealers to rethink their traditional strategies and business models. It is challenging the way we buy, drive and own cars. Car to X communication and interconnectivity is making driving not only safer but changes the role of the car from a driving vehicle towards just another – or maybe the central – device in live of a digital native. As more businesses move to digital, the opportunities for disruption increase and companies like Tesla, Google and Apple are challenging the “traditional” auto industry.
The rise of the ‘Millennials’ and Digital Natives have led to a number of new cultural norms and behaviors significantly different from those of prior generations. Digital Natives are content savvy, communicate constantly and are generating own content. Utilizing on ubiquity of internet, they are expecting access to information when and where they need it, striving for autonomy. This includes also the reduced need of product ownership, owning is not necessary anymore for product and service access.
We are facing a movement to a sharing economy, which is probably one of the greatest disruptors of the asset-intensive automotive industry. Car sharing addresses major challenges and trends in personal mobility: Aiming on easy access to fast and flexible mobility; increasing efficiency and individuality of driving. Inter-modular platforms like Moovel from Daimler allow finding quickly the fastest or cheapest way to reach a destination. By this automotive manufacturers are moving from “metal” producers to mobility providers.
This trend is being encouraged by the increase in human-centered design and strong focus on customer experience, driven by companies like Apple, Google or Tesla. Their customers now demand and expect both useful and powerful technology that provides a great user experience delivered with a distinctive design. The constant release of new versions and regular software updates are what inspire additional customer expectations. The “Apple-ization” trend is therefore the ultimate learning opportunity for the digitally-driven business and Apple’s success formula can be also applied to the auto industry.
Only by embracing these trends auto companies can remain relevant in order to respond to market changes and consumer demands. With the rise of the Millennials and our always-connected world, automakers need to rethink their value chain by delivering customer-defined value at each touch point.