A changing automotive industry
The automotive industry is undergoing far-reaching change. Technological advances in driverless vehicles, electric powertrains and connected cars are having an unprecedented structural impact on the sector. In addition to these upheavals, we now have the concept of Mobility as a Service (MaaS): a new challenge for automotive manufacturers to take on, and a major industrial integration and investment issue for an industry that is constantly reinventing itself.
The car: an essential component of MaaS
Mobility as a Service is a concept that puts travellers or goods back at the heart of transport services, offering mobility solutions tailored to individual needs. Under this model, transport of persons encompasses all modes of transport, from private vehicles through to public transport, not forgetting micro-mobility (bikes, electric scooters, etc.), which are considered a single mobility service. This requires easier access to the mode of transport or transport service, as well as personalisation combined with increased flexibility. This concept is set to become a critical component of smart cities. As an inescapable means of individual locomotion, the car must find its place within this new model.
From ownership to use: a significant driver of transformation
Consumption of cars as a product will tend to lessen as support from the baby boomer generation wanes and people increasingly switch from ownership to use. In developed countries, cars are indeed losing their appeal as a product among the younger generation, with the idea of use already winning out over ownership. MaaS could confine itself to public mobility systems. However, while the younger generation is opting for use rather than ownership, it is still keen to maintain a degree of freedom by favouring individual locomotion. This paradox represents an opportunity for automotive manufacturers. The diminishing scale of the auto shows points to the loss of appeal of automotive products – a trend exemplified by the withdrawal from the Mondial Paris Motor Show of major manufacturers like Opel, Mitsubishi, Nissan and, above all, Volkswagen. From now on, transport will be focused not on products but on customers/users, radically changing manufacturers’ positioning.
Manufacturers looking for new economic models
Automotive manufacturers are seeing MaaS as a way out of their manufacturing-focused legacy business. While MaaS-type services for the time being continue to depend on automotive groups’ finance divisions, they are increasingly becoming an identified business line. In response to societal change, automotive manufacturers are beginning to gradually move away from their traditional economic model that revolves around vehicle ownership. The emergence of new mobility suppliers, made possible by new technologies and alliances with suppliers of peripheral services, is giving rise to a new ecosystem. The transition to MaaS solutions will probably require substantial upfront investment just as profits in the traditional automotive sector are about to peak. Automotive manufacturers are moving into a phase when new business models are set to emerge. However, monetising these initiatives – positioned somewhere between the traditional automotive sector and end-to-end mobility solutions – still offers a fairly low return on investment.
Strategic moves mark the dawn of a new era
Manufacturers Daimler and BMW have merged their Drive Now and Car2go mobility businesses to form a single company, and now operate Under Share Now in the Jurbey offering which comprehends car-pooling, helicopter transport, taxi and ride-hailing services. The company already has 3,000 employees worldwide. With its Maven car-sharing service, General Motors is another iconic manufacturer involved in the evolution of MaaS; the service has already racked up over 300 million miles of use in 17 US cities. Meanwhile, in addition to its stake in Gett, Volkswagen has a proprietary mobility services platform named Moia. Tesla has developed Tesloop for long-distance car-sharing. Other manufacturers have opted to invest in start-ups. For example, Toyota has invested in Uber and Getaround, Honda in Grab, an Uber rival in Southeast Asia, and Ford in GoDrive. Moreover, thanks to the MaaS concept, these changes can now be monetised. With Free2Move, the PSA group is bringing together urban car-sharing services Autolib’, Zipcar and Communauto and peer-to-peer car-sharing services Koolicar, Drivy and TravelCar.
Given the gradual weakening of new car sales and the difficulty of standing out from the pack, it is inevitable that manufacturers will move into Mobility as a Service. However, this will require not only financial but also cultural and industrial efforts on their part. The shift from ownership to use is a challenge for automotive manufacturers, representing a far-reaching change in their business. To successfully negotiate this shift, manufacturers are going to have to step up their efforts in Mobility as a Service, as currently exemplified by vehicle electrification, driverless vehicles and connected cars, for example by forming more alliances in software and car-sharing services. European manufacturers are going to have to move fast to counter the controlling tendencies of the GAFA companies and the Chinese automotive ecosystem.
Véronique Vigner - firstname.lastname@example.org