Taking bets on the face of future mobility, investigated by Simmi Sinha.

Auto mobility systems are rapidly changing all across the world, which includes the introduction of Mobility on-demand, mobility-as-a-service, shared mobility options and wide adoption of automated and connected vehicles.

Currently, the deliberations are focussed on a variety of global trends in mobility services and ways those are affecting the changing users needs.  The automotive industry is growing toward a tangible mobility ecosystem as the development are exponential and radical. The changing landscape of urban mobility holds the potentials to modify automotive industry structures, dynamics, customer value propositions and business strategies and models.

Challenges and opportunities

On talking about the various aspects and changing landscape of urban mobility Martyn Briggs, vice-president, automotive research at the Bank of America Merrill Lynch, pointed that: “A convergence of trends and regulation is changing customer behaviour. Changing demographics (urbanisation), social preferences, technologies and policies from regulators, e.g. restricting private car use in city centres, are attracting a new wave of mobility services to move people and goods, challenging the notion of private car ownership. Future mobility business model will transform from ownership to usage: as consumer attitudes change, the current vehicle ownership model will be replaced by a growing share of fleet vehicles in the short term, owing to changing corporate and private lease requirements, growing volumes in car sharing, ride hailing and carpooling and, eventually, the deployment of commercial autonomous vehicles. Therefore, companies that develop operational, fleet management and customer service expertise alongside leading technology & user experience are likely to be successful in our view.”

Briggs believes that there are several challenges and opportunities the subject of mobility poses. Independent surveys are suggesting that one carsharing vehicle can remove seven to 25 privately owned vehicles from the road and ride hailing five to 10, as customers either sell or defer purchase of vehicles owing to the availability of new mobility services. Briggs said: “The challenges to OEMs are that volumes may reduce and return on investments/business model is uncertain, given the lack of profitability to date of many of these business models. Further challenges around reducing emissions amid more stringent targets, and investment required in electrification/autonomous technology, highlights the transformation required by OEMs in particular, and constrains the available resources to devote to new mobility services. However, the opportunities around increased revenue potential of a pay per use/distribution model and the ongoing shift of OEMs from pure manufacturers to service providers, could allow for revenue generation in far more areas, such as payment and parking, to cross selling into retail, leisure or food.”

Micha Risling, senior vice-president and head of Valens Automotive, talks about the global trends and what are some lessons for OEMs transitioning into mobility service companies: “The time is coming where we will be able to read books or watch a movie while autonomous cars drive us around. Juggling work, family or errands will become a thing of the past because our cars will handle the logistics… Except that, without a reliable vehicle infrastructure, this future will not be realised so quickly. Connected and autonomous cars will depend on dozens of sensors, radars, cameras and more, and all of these elements add a massive burden in terms of weight, space and latency to the underlying infrastructure of vehicles. Existing in-vehicle electronic systems are barely able to handle the demands of one camera and a couple of sensors. As we add more and more technology to these ‘data centres on wheels’, we must upgrade how data is transmitted and processed within our cars.”

What’s coming?

Briggs laid emphasis on how platforms can automate the entire market entry into mobility-as-a-service: “The autos sector is reacting with a combination of investments and partnerships to defend their position and rebrand as mobility providers. However, with the several new entrants/start-ups in the space, and technology providers looking to enter the sector also, value chains and partnership structures will become more complicated. Technology providers and platforms are becoming more important to increase operational efficiency of mobility services, especially around increasing utilisation. There are several examples of ride-hailing, carsharing and carpooling services being combined utilising the same fleet for different use cases (e.g. Ridecell/Reach) which can improve both the supply/demand side. The potential for these types of services will accelerate as more vehicles are connected and require less hardware solutions to enable them to be shared.” 

Briggs thinks that, auto manufacturers are now trying and training to think like electronics companies, he puts his point as: “The lessons for OEMs so far would be that price and service availability (e.g. ETAs for ride-hailing) are the key focus, rather than the core auto differentiators of type/trim of the vehicle. As mobility becomes more utilitarian, services are the future differentiator as opposed to hardware.”

[Mob.Sinha.2017.10.09]

Connected & Autonomous Vehicles

14 May 2018 - 17 May 2018, Santa Clara, USA

From vehicle electrification and infrastructure to the evolution of ADAS and vehicle automation to enhanced connectivity and new mobility models, no rock will be left unturned.