During the automotive industry’s current boom phase OEMs are announcing big, multi-year investments in new vehicle platforms that combine electrification with increasing driving automation. Because under new mobility data and loyalty will become central forms of value, OEMs must also consider deploying the loyalty-enhancing data-driven services these platforms enable. The services they introduce and the business models they use to monetize them will determine whether they become like Apple, AT&T or Foxconn in the customer relationships they develop.
The changes we have seen over the past 10 years in urban consumer transportation preferences with the ascend of on-demand mobility services should have convinced OEM executive teams that significant transformations of their business are necessary. For some OEMs transformations will imply producing vehicles that are based on sophisticated technologies, such as self-driving cars. For others it wil imply the adoption of new business models. OEMs will start offering vehicle subscriptions and mobility services directly to consumers as a result of their transformation.
n this second article we focus on on-demand mobility services, they issues they face, and the opportunities they have. The piece is pertinent to the conversation about California’s AB5 and the conversation it is raising. It also provides a good preview of topics I am discussing in my upcoming book.
The automotive industry has survived many swings of feast and famine using a business model that is largely unchanged in a century. The industry has made a remarkable recovery in the decade since the Great Recession, with record sales and profits over the past five years. Yet despite this success, there is broad recognition something fundamental has changed and that focusing exclusively on the current business model is unwise.
The congressional and European Parliament testimonies of Facebook’s CEO focused attention on Internet and ecommerce corporations whose business models rely on the collection and exploitation of big data, with personal data being a major component. Legislators and the public at large came to realize a) the leverage such companies now possess through the dominant positions […]