Auto Brands are Dead

Having worked in the auto industry for almost 5 years and reflecting back on the transformation that has been happening from an outsiders perspective, I’m amazed at what the industry looks like today. Over the last few years, we’ve transformed from a manufacturing, Auto industry to an automated, shared mobility economy. This new world looks and acts much differently than what we’ve always known and an industry where we’re not quite sure about what the future holds. 

There are many trends that have lead to this moment of transformation from Auto to Mobility outside of the technology itself. There’s been an influx of urbanization which has lead to a need of multi-modal travel. The consumer behaviors around micro-transportation through ride-hailing and sharing. Perception around vehicle ownership versus sharing has created multiple adjacent industries to develop. 

Not only have these trends shifted the behaviors of the auto industry, but have effected the secondary and tertiary markets around the auto industry. Tent stakes like auto insurance, service and maintenance, to more progressive markets like parking, car washing, fueling, etc. The transformation and expansion of these services have brought more churn to the view of the industry. 

This transformation has lead to a lot of decisions that need to be made at the OEM brand level and a lot of questions left unanswered. 

THE AUTO / MOBILITY ECOSYSTEM

Looking at the trends in the marketplace and the shifting behaviors in consumers around the world, we’ve started to make sense of the shifts to see where we might end up in the near future. 

Our view of this transformation in auto / mobility ecosystem will start to look very much like an expanded view of the airline industry. With the structure of a pyramid, we see consumers behaving in a new, but systematic way while OEMs, auto service companies, technology providers, and government all play a crucial, but much different role. 

To succeed in this future economy, OEM brands must decide where they want to play in this new industry and plot a path forward.

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INFRASTRUCTURE: As this new world emerges, the infrastructure becomes increasingly important for a seamless and efficient personal travel experience at scale. This includes everything from smart city to electric vehicle charging to governmental regulations to allow and activate the evolution of the mobility industry. This will start to look like airports, air traffic control and regulations for how consumers and the airline industry acts.

COMPONENTS: These are what we know as OEM’s today. The physical make and model of a vehicle. However in this new economy, the brand becomes irrelevant and the physical vehicle becomes a mere portal for transportation. The success for OEM brands in the future is to either embrace this new role, or stack roles to become a driving force in this new economy. This building block will start to look like Boeing or Airbus for the airline industry. An OEM that makes need-specific components to execute at the network or service level. 

SERVICES: These services provide passive and active elements for the network. These include ownership and automated services like parking, maintenance, or fueling. These services are mainly being supported in the startup community currently with some OEMs getting into the game. 

OPERATING SYSTEMS: This is the connective tissue that powers the relationship between consumer and the service they are requesting. Whether car sharing, ride hailing, owner access, or fleet management the operating system will provide the tools, data and connectivity to power the direct access to the service. This is an open space right now in the auto industry with players like Uber, OEMs, Apple, Automattic, etc taking some of the market share. In the auto industry, we see some players like Honeywell Connected Aviation or viastat.

ARTIFICIAL INTELLIGENCE: As vehicles become autonomous and the personal transportation becomes time and need based, the rise of artificial intelligence will provide consumers with a proactive relationship with their personal transportation services. Leveraging real-time traffic, weather and network data, along with consumer preference and need data, the network responds and reacts to all data points to make transportation and travel as seamless as possible. For moments of maintenance, service or emergency, the network (smart city & vehicles) provides rapid access based on the automated need. Here we see companies like Nutonomy, drive.ai, and Waymo making waves in the auto industry. 

NETWORK: This is the interface that the consumer will interact with. This is where the network and technology actually comes to life for the consumer. This provides the access to the service required based on the personal need of the consumer. The equivalent with this in the airline industry would be Delta or Virgin. Right now, the players in this space are Ubers and Lyfts of the world, but more increasingly we’re seeing OEMs start to play in this space like Maven, Book by Cadillac, BMW’s ReachNow.

CORE BUSINESS DECISIONS TO BE MADE

While understanding the direction the entirety of the industry is heading, OEMs and other auto companies need to make some decisions to understand where they will take their company. and how they will position themselves in the future marketplace. Trying to take it all on is a huge and impossible undertaking, but being strategic and focused, stacking services could provide the right companies with massive opportunities

How are you seeing the auto industry transform?

Paul MiserComment