There has been much talk over the last few weeks at the Consumer Electronics and NAI Auto Shows around the impact of driverless cars on the future of the automotive market.
The (relatively speedy) development of the technology behind self-driving cars could have a profound impact in the future on the wider value chain that sits behind the automotive market, and the business models that underpin it. Just as Elon Musk has made shockwaves across the industry by launching a technology-first proposition into the electric car mix, the likes of Google have also been making their own headway into the market.
The point? You don’t need to be a traditional car manufacturer to enter the automotive market anymore. And the influx of these technology giants into the market is having an astonishing impact on the rate of change of prototype development, making this an incredibly exciting time in the automotive sector.
More broadly though, technology is changing not only what we’re driving and how we get from A to B, but how we approach transportation.
A growing urban population worldwide, technological advancements and the emergence of the ‘collaborative economy’ – the sharing of assets rather than owning them – has led to swift changes in how consumers purchase and experience goods and services.
Already companies such as AirBnB are taking advantage of these trends, and while companies such as Uber, ZipCar and BMW are making significant headway in the automotive sphere, one provider is yet to dominate the transport market in a similar way.
There are clear opportunities for mobility providers to take further advantage of these changes in consumer behaviour. Connected and mobile consumers with increasing expectations of individualised ‘transport as a service’ will provide automotive brands with the opportunity to tap into the revenue potential of both in-car media integration and end-to-end mobility services.
As a result, there are a number of consequences for the transport and mobility industry as a whole. Private car ownership sales may decrease in the short term, due to a decreased desire to own an expensive vehicle, whilst demand for fluid access to a car and/or other mobility solutions such as car sharing will increase. And car manufacturers will need to explore how they too can provide ‘mobility as a service’ to respond to these demands (while some, such as BMW and Daimler are already doing so – though these offerings are still in their earlier stages).
Where do driverless cars fit into this mix? Details are scarce around the likely cost of models in development – which range from the luxury concept model recently showcased by Mercedes to Google’s more modest offering, which despite its mass-market target is still estimated to cost in the region of $75,000. In the short-term (well, by 2025 according to the most recent launch date estimates) it is more likely that driverless cars will be launched as part of a broader mobility solution – a fleet of driverless vehicles on-demand to take consumers (who may or may not have had a drink or three) home.
Clearly automotive manufacturers will need to think strategically about how they approach a future that sees driverless cars slotting into the wider mobility solutions market. And yet – while these innovative approaches to mobility continue to proliferate, they shouldn’t lose sight of their shorter-term customers and their needs. If we’re learning anything from the popularity of Uber-like services, it’s that people want simple and cost-effective solutions to get from A to B. The question is, how do consumers envisage this being incorporated into a vehicle?