Grégory Derouet, Global co-head of Automotive Sector, Mazars, says the consumer habits underlying the automotive industry have shifted significantly in just three generations. “My eighty-six-year-old grandmother witnessed the transition from horse and cart to cars. For my parents’ generation it was normal to own one car per person. Some of the next generation will no longer talk just about cars, but a new set of criteria beyond mobility.”
The second quarter of the twenty-first century will be dominated by retooling economies in order to serve more people, decarbonising, and improving resilience in the face of pandemics and other risks. It will also be characterised by new technologies, rich datasets, and changing consumer habits.
As a result, according to Derouet, “the automotive industry is undergoing a major transformation in operations and mindset once again. It is moving from the ‘heavy footprint’ model of the twentieth century, characterised by mass produced, carbon-intensive manufacturing and asset ownership, to the ‘light footprint’ model of the twenty-first, characterised by personalised systems, shareable mobility technology, and more sustainable technologies.”
What are the key aspects of the automotive industry’s transformation?
- Adapting to a higher standard of sustainability. That means increasing occupancy rates, improving energy efficiency and reducing carbon emissions. It also requires manufacturers to respond to changed transportation habits such as more walking and cycling and to prepare for more policies designed to nudge consumers towards lower carbon alternatives.
- Growing demand for shareability and integrated systems. Both are radically reshaping markets and putting a premium on integration with connected systems. Apps such as ‘Whim’ in Helsinki – which offers a ‘one-stop shop’ for access to public transport, city bikes, taxis, and rental cars – are increasingly popular.
- Prioritising personalisation. We will see automotive manufacturers competing to recognise individual preferences in the car.
How to succeed in the ‘mobility as a service’ era
Companies in the automotive ecosystem will need to shift gears to win in the MaaS era. “In the future, success factors will be the ability to improve their ability to gather and analyse data, cultivate successful – and sometimes unusual – partnerships, and foster imagination and creativity,” says Guillaume Devaux, Global Head of Technology Sector, Mazars.
The data battleground
Manufacturers must increasingly compete on their ability to capture and analyse data. For example, a car which uses voice tone recognition technology to gather data about the driving experience from subtle signals in a driver’s tone of voice may be able to provide useful data about customer preferences. “Manufacturers already capture extensive types of data such as parking times, distance travelled, and data on individual components within cars,” explains Derouet. “However, a large part of the value of the data comes in the ability to identify it, analyse it and tailor the next generation of cars accordingly.”
Retooling to put data gathering and analysis at the heart of the strategy may require internal transformation, the acquisition of new skills and capabilities, and significant investment in research and development. Manufacturers that can be imaginative and forward-thinking about how to improve the experience of being in a car will gain an advantage.
Winning through partnerships
Manufacturers will also need to make the most of partnerships and joint ventures with carsharing companies, dealerships, companies using fleets, and others.
Carsharing is an area where partnerships are a key success factor, offering manufacturers access to new revenue streams. Devaux offers the example of Free2Move, which enables consumers to find and compare vehicles from a wide variety of carsharing providers. “The app is owned jointly by automotive incumbents, Peugeot, Citroën and Opel, and saw double-digit revenue growth in the first half of 2020,” he says. “In the coming years, more partnerships and joint ventures will be necessary if manufacturers are to capitalise on the shift towards carsharing and test business models that will survive this digital revolution.”
Agreements to supply some of the larger shared mobility platforms are also a growing success factor, as they look set to provide a greater proportion of demand. Their requirements differ from consumers, as they tend to favour cheaper, more uniform models.
“Partnerships with car dealerships – digital or brick and mortar – remain important as they tend to own the relationship with the final buyers,” says Devaux. To hold and grow market share, manufacturers will need to build these relationships. Dealers also remain invaluable in the short term by providing consumer services such as warranties and aftercare, although that is changing amid the Covid-19 pandemic.
Partnerships with employers that offer company cars may also become an increasingly important success factor if cars are seen as a company benefit rather than an individual purchase.
Devaux argues that successful manufacturers of the future will be those that find a balance between “commodity, utility, brand image and the value they add.” Above all, this shift from a manufacturing mindset to a MaaS mindset will require imagination to rethink fundamental assumptions about what a car might do, the data and analytics capabilities to validate those assumptions, and the ability to transform processes to deliver them effectively.