Exciting news!
"From Germany recently came word of a spectacular and amazing development in the field of aeronautics—a flivver plane that is at the same time an automobile; a machine only 18 feet long and less than six feet wide when the wings are folded back, small enough to be housed in the ordinary one-car garage!"
...from the March 1926 edition of Popular Science.
People have been interested in flying cars for nearly a hundred years now. But flight marks just one innovation in the automotive industry that's perpetually upcoming... what others are there, and are they in reach? Revolutions in clean fuel (admittedly less appealing to sci-fi directors) are underway, and also near on the horizon are fully self-driving cars. Beyond decisions like which FinTech interview you should read while your car drives you to your next meeting, what will driverless cars mean in terms of business models and selling criteria for customers?
Our Global Automotive Executive Survey 2017 looks at exactly these questions. With nearly 1,000 respondents from automotive companies around the planet, we've brought you the top trends in the car business both now and (pardon the expression) down the road. Download the entire survey via the previous link, or read on for key headlights and driveaways (sorry again).
Just a few more miles before combustion goes digital
Before we get to the more fun discussion of future and futuristic cars, we must take stock of where manufacturers, technology, and customers are as of early 2017. Alternatives to petrol are still being sought as ways to be more environmentally responsible and to overtake (sorry, it keeps happening) geopolitical quagmires, and 78% of our respondents see fuel cells as the next breakthrough in this area. However, fuel cells are not quite a reality yet—instead, battery-powered vehicles are the number one trend of 2017, up from number three last year and number nine the year before. As the following chart shows, fuel cells are, technologically, only at the testing phase and are not yet properly in the minds of consumers—but they will be something to very much keep in mind for the coming years.
Despite the buzz around fuel cells, petrol is still driving us forward (honestly, I'm really sorry): three in four of our respondents agreed that internal combustion engines will be more important than electric cars "for a very long time." How should this statement be interpreted with consideration for the mindsets of customers, however? I only mean that many car-buyers are ready for electric and green solutions today, with social pressure to make purchasing decisions with their carbon footprints in mind—as well as, I hope, genuine interest in their carbon footprints. This means that auto companies will have to balance their mainstay petrol-based offerings with forward-looking R&D on fuel cells and other technologies.
Give the people what they want
And what they don't want are... cars.
Wait, what?
Yes, it actually looks that way: while bearing in mind that this is a projected trend and not an impenetrable truth, at the present moment as many as 59% of auto executives agree that by 2025 people won't want to own a car. This means that those features that auto-sellers have traditionally attempted to salivate the mouths of consumers with will stop being important: mileage, acceleration, horsepower, etc. Instead, the main selling points will be how passengers can spend their time inside the vehicle, alongside safety and convenience—if you don't own a car, then you would probably be interested in subscribing to a service that allows you ready access to one when you need it.
A striking nine out of ten executives absolutely or partly agree that this is the industry's next destination: that consumers will base their mobility purchase on products and services not related to the vehicle itself. Indeed, a parallel might be drawn to the airline industry: most flyers are far less interested in wingspan and cruising velocity than they are in on-board comfort, departure times, and, naturally, cost.
Another projected industry shift has to do with data, which seems to be underlining every revitalised product in the present era, cars being no exception. We have already seen InsurTech companies offering insurance products that reward drivers based on driving habits, which can be judged pretty accurately: for example, determining how much texting you do while driving, or how often you speed, or just how much you drive at all. Interestingly, our survey shows that customers overwhelmingly feel that they should be compensated for this data—84%, to be exact. This contrasts heavily to the 45% of executives who believe that nothing need be offered to consumers in exchange for their data. Disparities like this one suggest a marketplace that is adjusting to new norms and needs, and could spell new successes for the opportune.
Consumers and execs do agree, however, on data security and privacy: both groups rated this area as the top new purchasing criterion.
The business of driving the driving business
Is it easier for a tech company to build a car, or a car company to brandish technology? Despite very interesting offerings and stirrings in Silicon Valley, only 25% of consumers agree that newcomers from this area are the most trustworthy. Regardless, what's certain is that any auto-producer who wants to accelerate (really, I apologise) in the marketplace will need a business model that combines service and data into one digital ecosystem, with—no surprise here— the customer in the centre.
I invite you to browse or download the full survey, which includes additional insights like opinions on current powertrain technologies, which companies are leading in electric mobility, the digital ecosystem, macroeconomic factors on growth, and much more.
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