Having worked in and with the automotive industry for around 25 years, the challenges that OEMs face given their size and structures often inhibit the business agility needed to provide lasting customer value in an age of digital disruption. The focus has always been more skewed toward the product experience and product features and defining greatness by "number of cars."
Mobility as a driver for change has existed for more than 10 years, but the increased competitiveness from nontraditional players has created new challenges for OEMs and forced them to rethink their role. It has produced more service-oriented ideas such as car-sharing schemes, partnerships with ride-hailing services, and closer collaboration with urban planners.
Despite these changes, I think that the focus is still on the "number of cars." The recent merger of Mercedes-Benz car2go and BMW DriveNow highlights the need to increase fleet size to be able to compete with nontraditional automotive players, and the main message I took away from the MQ! The Mobility Quotient 2018 Innovation Summit was that autonomous cars, smarter service offerings around cars, and better working together with urban planners would somehow manage the mobility expectations of the future. Considering that the physical format of mobility remains unchallenged -- it still looks like a car -- the future seems secure for the OEM.
Dr. Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz Cars, is quoted as saying the following after the merger of car2go and BMW DriveNow: "As pioneers in automotive engineering, we will not leave the task of shaping future urban mobility to others. There will be more people than ever before without a car who will still want to be extremely mobile."
The desire of the OEMs to still define the terms of what mobility will be may make business sense, but mobility is more than just the car. Mobility is about convenience and empowerment, and it is a commodity to be used rather than something to be owned. Making mobility convenient will depend on how well companies work together and manage and share data within mobility ecosystems.
In February 2018, 15 technology companies (BlaBlaCar, Citymapper, Didi, Keolis, LimeBike, Lyft, Mobike, Motivate, Ofo, Ola, Scoot Networks, Transit, Uber, Via, and Zipcar) signed the "Shared Mobility Principles for Livable Cities." Some of the objectives of the shared principles are to place people before technology, work together, move toward zero emissions, and share data. Is it a coincidence that there are no automotive brands in this list? It seems the pioneers are not alone.
Data and the capability to manage and share data will be the differentiators in the future of mobility, and managing the data from the first mile to the last mile will provide incredible insight and power. This capability will be the OEM's most significant challenge to overcome, and it will also challenge the OEM's position and influence in an industry that will likely not be called the automotive industry anymore but will take on the term "mobility industry."
To remain relevant, an OEM must learn how to share and participate more proactively rather than defer to its automatic response to new challenges by building walls to protect itself. Trying to defend itself will only isolate the OEM from the mobility industry, its data, and customers. For an OEM, the following three areas are crucial.
Sustainability, commoditization of mobility, hyperadoption, and increased mobility offers are changing the perception and need for car ownership. More solutions for the first and last mile are connecting people to mobility networks that make their commute more productive. Deloitte's report on the future of mobility estimates that as much as 66 percent of new vehicle sales in urban areas will be shared by 2030.
The OEM may still build cars, but the reduction in ownership has a massive impact on its distribution network: The car dealerships. Dealerships must be transformed to be less dependent on the OEM and more connected to the mobility ecosystem through platforms that enable the exchange of data using APIs and microservices. Given the current state of technology and technology capabilities at dealerships, few will survive if nothing is done.
The impact for the OEM is the loss of data. No more ownership means no more data and no more managing of a customer relationship in the ownership lifespan. OEM car-sharing services have shorter relationships and have higher challenges to maintain loyalty, and the data silos of car-sharing services continue to frustrate customers. Consolidating data and providing easier management of mobility should be a priority.
Future Mobile And Digital Landscape
The transformation of mobile and digital is causing a shift in managing experiences with customers. The possibility to isolate brand experiences is changing because digital devices, whether they be mobile phones, consoles, home electronics, or cars, become smarter and can orchestrate content more intelligently. Customers also expect seamless experiences across channels and devices.
An OEM must transform the way content is produced and managed to be able to communicate in an environment of intelligent device orchestration. It also needs to make content available for orchestration through ecosystem platforms and APIs. Self-defining the rules for content delivery disappears, and remaining relevant depends on the capability to manage content in a more agile and dynamic manner.
The changes in mobile and digital, together with customer choices and access to services, redefine the way customers solve the jobs that need to be done to fulfill their needs. Customers do not rely on the linear journeys provided by brands anymore but orchestrate their customer value and experience ecosystems by themselves.
The OEM and dealers alike need to expand their understanding of customer journeys beyond the brand and incorporate the whole customer ecosystem. Understanding the value an OEM has in the ecosystems allows for more personal experiences and also identifies further opportunities to remain relevant in customer value and experience ecosystems.
Ecosystems are different for individual customers, and it is not possible to manage ecosystem journeys the same way as today. The implication is that an OEM needs to access more data and use technologies such as artificial intelligence and machine learning to analyze and dynamically adjust to changes in the customer ecosystems.
Sharing Is The Only Real Choice
The red thread in the areas described above is data. The capability to access, manage, and share data will define the role an OEM has in the mobility industry. Digital disruptors that build services on data are becoming bigger players in a mobility industry determined by data, and they provide experiences that an OEM is traditionally not able to provide.
This is also where the opportunity exists, however. OEMs and dealerships have infrastructure that complements the offerings of digital players. The combination of established infrastructure, data exchange, and dynamic digital services enable the promise of future mobility. Sharing and working together will have the most significant benefit for customers, and hopefully, that is the same objective the OEMs have, too.
-- By Lorenzo Introna, principal consultant
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