Monday , December 5 2016

2016, The Year that Carmakers Ventured into Transport Providing Business

From Ford and GM to BMW and VW, 2016 has been as much about trying to solve the consumers’ mobility issues as it has been about trying to sell a people new cars.

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From Ford and GM to BMW and VW, 2016 has been as much about trying to solve the consumers’ mobility issues as it has been about trying to sell a people new cars. And as technological innovations continue to come thick and fast and to the urban areas become even more crowded, this could well prove to be the shape of automotive things to come with car companies reinventing themselves as transport service providers.

In September, when Ford set out its future business plan, President, and CEO, Mark Fields said: “The world is moving from simply owning vehicles to owning and sharing them. That’s why we are expanding to sell more vehicles and provide the transportation services at the same time.”

And the Blue Oval is by no means alone. From Mercedes-Benz and BMW to Audi and Toyota, 2016 signaled a concerted effort to move  simply from building cars to solving  the consumers’ mobility issues.

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In October international Daimler-owned car-sharing company car2go celebrated attracting its 2 millionth member, eight years after its launch, and  the GM has spent most of the past 12 months investing in existing ridesharing services like Lyft or buying up the assets of failed ventures.

Yet as a percentage of  an average person’s salary a new car has never been cheaper to own, so why are the world’s biggest carmakers looking to change their business model?

The simple answer, according to Bosch, is people living in  urban environments are falling out of love with the idea of car-ownership. Of being stuck in  the traffic, of never being able to find a parking space plus  with the fact that public transport systems are increasingly efficient & connected — planning a route is now no more difficult than launching a smartphone app.

And, as a result, “The car as we know it will soon be history,” said the  Bosch CEO Dr. Volkmar Denner. “Today you use the internet to book a hotel room; in the future, you’ll arrange your mobility online as well.”

And if carmakers don’t move quickly to address this change in the  behavior then any number of tech startups could instead. “Cities globally are dealing with an increased congestion, a growing middle class and environmental issues — all of which can be alleviated by developing  the mobility solutions fine-tuned to the unique challenges of each location,” said Jim Hackett, chairman, Ford Smart Mobility LLC.

Gateway to more services

Over the next five years, the global market for  the connected mobility is expected to grow by 25% annually. With every year that passes the technology  in underpinning, it will get more powerful, more spontaneous and more connected. This, in turn, will open the doors to even more potential services.

Take parcel deliveries for an instance. Smart and Volvo are both already testing services where couriers can deliver  a package to the person’s car, using their phone to unlock the vehicle and to send a ‘package arrived’ message. “Alongside the home and the office, the car will become the third living environment,” explains Denner.

The car is becoming the  major hub within the internet of things: BMWs can now communicate with Amazon’s Echo home assistant and any Mercedes with the right options may remotely tell a Nest thermostat that its owner’s stuck in traffic so the heating doesn’t need to come on yet.

And as they connect to the IoT, they will also connect with the wider transport infrastructure, public and private. “In a few years, mobility will be flawlessly connected,” said Denner.

And at that point, the concept of a privately owned car could be usurped by the idea of a publicly shared vehicle that’s yours when you need it.

 

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