10.01.2022
Climate change, demography, urbanisation and individualisation on the one hand, as well as technological developments and digitalisation on the other, require and enable us to redefine mobility.
As the urbanisation of cities continues, there is a growing need to connect urban and rural areas more closely than ever before. Enabling and securing the flow of people, information, goods and services is crucial in order to maintain a healthy and stable economic system. Multiple cities around the world have already launched initiatives to discourage car ownership, such as Oslo’s car ban from the city center or the UK's "Future of Mobility Grand Challenge". At the same time, there is a need to invest in infrastructure such as railways and roads to link urban and rural regions and benefit from a mutually beneficial relationship.
The convenience of living in the city with comprehensive public transport services and flexible mobility solutions such as ride-hailing, bike-sharing and e-scooters will spread beyond previous boundaries in the future. This is because former suburban areas will become more integrated into the big city life. COVID-19-related mobility restrictions and social distancing policies will drive consumer demand for flexible, individual transport options.
The emergence and consolidation of mobility as a service
Technological progress means that previously separate mobility services are growing together. Ride-hailing and taxis are becoming one. Autonomous vehicles make the presence of human drivers obsolete. Car sharing and car rental services are merging into one.
Many car manufacturers are positioning themselves in this area. They invest in, partner with or buy out mobility companies:
- Daimler and BMW have merged their urban mobility services under Your Now and jointly offer services such as ride-hailing, car sharing, trip planning, mobile parking and electric vehicle charging ~ YourNow
- Toyota has made investments in Revel, May Mobility and several other companies ~ Toyota
- Uber has entered into a key partnership with the scooter rental company Lime ~ Scooter Partnership
- Cruise forms the core of GM’s self-driving effort ~ Cruise
Looking at new mobility trends, it is easy to paint a bleak picture for the future of car manufacturers. However, there are opportunities to consolidate the traditional business of selling cars, while developing new business areas to meet future needs of the mobility market. It is therefore essential for car manufacturers to look into the development of new products and services in order to protect their core business as much as possible.
On the one hand, carmakers are aware that they need to make their product offering more efficient. They need to align their portfolio according to which products are most valuable for the respective markets. Superfluous models and vehicle variants must be reduced.
On the other hand, car manufacturers today are working hard to develop relevant services for consumers. The development of a service is fundamentally different from that of a vehicle. It requires continuous, iterative adjustments and regular updates, much like updating operating systems and apps. The decision-making processes in designing services need to be fast and lean. Services have the advantage of providing direct and regular access to the customer. This enables car manufacturers to better understand their customers and continuously improve customer experiences.
Why is this relevant for the Generation Z?
The transition from individual mobility services to holistic mobility platforms is in full swing. Due to the variety of transport options, growing environmental concerns and increasing space problems in urban regions, more and more consumers are opting for a small, inexpensive and less luxuriously equipped car - if they buy one at all.
What does this mean for the automotive industry?
Customer centricity is the key to success, no matter what strategy an automaker pursues. To remain competitive, carmakers must adapt to changing consumer preferences and push customer loyalty. Ownership models are only one way to meet customer expectations. To create real value, car manufacturers need to understand their customers.
Written by: Lorenzo Federici