A business perspective about the future of mobility
The 4th of April, I had the pleasure to attend the third SMMT Connected edition where 450 senior OEM representatives listened to 24 world class speakers about the future of mobility. The quality of the insights and the level of performance delivered by top executives such as Andy Palmer, Aston Martin CEO, or Agustin Martin, TCEU Toyota Connected CEO, motivated me to share my key takeaways about the future of automotive.
Connected mobility – the global landscape
$100+ billion were invested in autonomous technologies worldwide
Building an ecosystem with autonomous, or at least connected, cars takes time and requires huge investments in terms of efforts and money. More than £500 m have been spent worldwide in R&D to develop future technologies for autonomous vehicles (AV) while more than $100 billion were invested in autonomous technologies worldwide. The first models produced from these researches could be on our road by 2021. To make things happen, many test beds are taking place around the world, more specifically in the UK, France, Germany, North America, Japan and China.
More specifically, in the UK we can expect by 2030 that 1 every 5 miles could be travelled with an AV with an overall impact on the economy of +£62 billion (SMMT 2019).
How to transit from a car manufacturer to a mobility provider?
Agustin Martin, TCEU Toyota Connected CEO, shared his vision on how Toyota is planning to be a mobility company by 2030. The traditional and conservative car manufacturer business model, that has not really changed for decades, is about to be transformed massively in the next coming years. The connected and mobility products and services are expected to rise from 6% to 37% of the total automotive market by 2030. The demand side of the market will be dominated by cities, individuals and corporates expecting connected, seamless, on-demand and personalized mobility services. These customers will be driven by the desire for more connection, less ownership and a safer, a faster as well as a healthier environment (fewer congestions, pollution, stress and commuting time).
A start-up dynamism will be required to transform car manufacturers into mobility providers
Even though Toyota is a global car manufacturer, the firm has understood that this transformation will only be successful thanks to its ability to implement agile and lean technics from the start-up ecosystem.
Europe seems to be the perfect ecosystem to launch AVs
In his conclusion, Agustin Martin emphasized that Europe seems to be the perfect environment to meet the conditions needed for the AV technology to be deployed thanks to:
– Urbanisation: congestions, increasing population density in city centres and old infrastructures are some of the main points driving an incredible interest for AVs.
– Mobility: Europe has a fantastic history of mobility for centuries with top-notch companies and people working in the industry.
– Data Governance: one of the main pillars of the future of mobility is data governance. With initiatives such as GDPR, Europe is one of the leading regions in terms of data privacy and security. As Jonathan Bamford from the Information Commissioner’s Office mentioned, this sensitive topic is even more relevant considering that “personal data is the new oil”.
What about the luxury side of the mobility industry?
Andy Palmer, CEO of Aston Martin Lagonda, provided the audience with valuable insights on how the luxury car manufacturers intend to adapt to these massive changes.
The luxury market will still probably be based on the classic ownership model
According to him, this side of the market will remain mainly driven by the classic ownership business model. However, there is a unique opportunity for Aston Martin to relaunch Lagonda as the first fully electric luxury car manufacturer and take a leadership position in this niche industry. My opinion is that Mr Palmer is not considering rising players, such as Karma Automotive, that could represent strong competitors to Lagonda. Moreover, EVs will allow car manufacturers to rethink the interior of their sedans, eventually creating a brand-new niche segment within the classic automotive branch.
There will have opportunities to create a new niche segment in the fully electric luxury market
Connected mobility – What’s next?
Welcome into a world of rent, lease and share
The future of mobility is going to disrupt the way we are moving things and people from point A to point B. Forget about owning your car, scooter or even your bicycle. Welcome into a world of rent, lease and share. According to Lars Klawitter, MD at Inmotion Ventures, the future of mobility will go through multimodal platforms integrating payment systems for a complete transport experience.
We have to step back and think about how to include customers currently outside of the OEM business model
However, Scott Shepard, CCO of Free2Move, identified two main challenges. The first is related to the people outside of the current OEM business model. For example, think about anyone who does not need a car. How these platforms will be able to capture these potential customers and propose them mobility services? The second is about the myriad of offerings and solutions under development today. Scott believes we have to step back and identify how these products and services will impact people’s life to serve them better in the future. There is no doubt that some of the current projects will be abandoned because there is not enough interest, which could have been identified earlier with a more in-depth market analysis.
There is little feedback about customer acceptance
Finally, Helen Wydle from Catapult highlighted the importance of customer feedback about AVs. Today, companies are developing a lot of exciting projects without the opportunity to know and test whether people will enjoy these products and feel comfortable to be driven by a machine.
I hope this short overview of SMMT Connected 2019 has been helpful for you. If you want to discuss this topic with me, please feel free to connect with me.
Thank you very much to Matt Smith for giving me the opportunity to attend this event.