We live in an on-demand world, where we expect convenience and satisfaction 24/7. What are automakers doing to keep customers engaged and seduce younger generations in this climate of consumer is king?
At this year’s Consumer Electronics Show in Las Vegas, the place that showcases the latest and coolest consumer technology, the key highlight was not a phone or a TV but a car: the self-piloted Audi 7. Why is a car manufacturer all the buzz at the consumer electronics show? And what does this tell us about the automotive industry at large? Here are my thoughts on why the cars of the near future are truly putting consumers in the driver’s seat.
The brave new world of customer service
As customers, let’s face it, we’re spoiled. We expect companies to answer our complaints and requests over social media no matter the time of the day, and to watch our favorite shows when we want to watch them as cheaply as possible. We want phone companies to offer us plans that require no contract or commitment, and devices that are affordable yet top-of-the-line. Why wouldn’t we crave the same perks in our rides?
The 2008 recession had most automakers on their knees, but five years later the industry is almost, shall we say, thriving? One could say that the crisis forced automakers to streamline and focus on vehicles that have a market and a future. This shift prepared them to face today’s challenges: the rise of the collaborative economy, the omnipresence of technology, and a growing urban population.
In today’s cities, at least, the car is no longer the object of consumer identity nor the sole image of convenience and independence. Younger generations care more about their mobile devices than about owning a car. The concept of mobility has also radically changed with services like Uber and Lyft and better public transportation options in addition to more bike lanes.
Added to that, new players such as Tesla and tech giants like Google, AT&T, Microsoft, and Apple are now claiming a piece of the automotive pie. Will we even have Ford, Volkswagen, and Chevrolet in 10 years?
UPDATE 6/14: Tesla releases their patents as open source.
Social media and Big Data are enabling companies to know more about their customers than ever before. For companies with long production cycles, such as car manufacturers, keeping pace with technology and consumer expectations is a make or break endeavor. But some automotive companies are taking advantage of the 24/7 access to customers to generate design ideas through social media.
Others see promise in the connected car concept to offer new and personalized services, from anticipating danger on the road to letting customers know about an upcoming maintenance service. BMW admits designing a car that is reminiscent of smartphones. In a recent conversation with Gustavo Filip, who works for HP serving the automotive industry, I learned a bit more about the profound transformation that automakers are going through.
Safer, more efficient
According to Filip, the cars rolling off the assembly lines today are now equipped with intelligent systems ranging from integration with mobile phones to complex telematics systems that allow you to control ignition, lock and unlock doors, and more. In the megacities of the future, integrated traffic information and alternative transport options will be key both to efficiency and safety. Studies already show that self-driving cars outperform human drivers. Remotely troubleshoot car repair without having to visit a service center? Your self-driving car running your errands? The possibilities are endless.
“Cars are turning from big machines towards a data center on 4 wheels.” – Gustavo Filip, HP
Carmakers know that the younger generation of urban drivers don’t necessarily want the hassle of owning their own car, and they are answering with programs that combine car sharing and traditional rentals. BMW created DriveNow, which gives subscribers the convenience of accessing a car in any city where they offer service and dropping it off at any location. Daimler, meanwhile, already has more than 500,000 users with Car2Go.
Innovating the auto mall
Apple changed the way we shop for technology. When we walk into a store we expect to be able to interact with the product and get recommendations from knowledgeable employees. Why shouldn’t buying a car follow suit? Filip points out that Audi’s new concept called Audi City includes sophisticated downtown showrooms that allow potential customers to build the car of their dreams on a screen.
You can also buy a new i3 BMW online and have it delivered to your door. In fact, BMW wishes to sell all of its models online one day soon and employ a mobile sales force that travels to the buyer instead of being centralized at a dealership.
Newcomer Tesla, who’s outselling BMW and Audi in California in the luxury car category, offers the whole range of the retail experience: sleek showrooms, online experience, and at-the-door service. Will car sales follow the playbook of the travel industry and go totally online? It looks likely.
Partnering with tech giants
Consumers expect their cars to be as smart as their phones. Syncing your phone with your car’s audio system is peanuts. Imagine being able to access the convenience of your apps directly from your car’s dashboard.
Opportunity in the connected car market is said to be worth $50 billion from in-vehicle mobile ads, $500 billion from maintenance, and $5 billion from service subscriptions. It’s no surprise that alliances between automotive and tech giants are starting to form. These operating systems are already being used by millions. Why not extend it to cars?
The battle between operating systems has picked up speed with the recent creation of the Open Alliance dedicated to bringing the Android Platform to cars. The idea of an operating system in cars dates back to 1998, when Microsoft announced plans to work with automakers.
UDPATE 6/25: Google Announces Android Auto
Although Microsoft has the lead in this field (you can find Microsoft SYNC system in (5 M Ford cars) others are quickly closing in. Google announced partnerships with Audi and other automakers at CES 2014. And Apple has already forged alliances with GM, Honda, Mercedes Benz, and BMW. No car maker wants to be left behind. The chart below shows that most car makers are members of many initiatives.
Innovation is key to keeping an edge in any industry, and automakers seem keen on giving us—the customers—the best that technology has to offer. Will we ever elevate the car to the status it once had? My guess is no.
But all the same, I believe the future is bright for the automotive industry and even more radiant for us consumers. Here’s to more efficient and safer vehicles, whatever shape they may come in! Just keep your eyes on the road unless your car is driving itself.