Spoilt for choice

When it comes to buying a new vehicle, consumers can be overwhelmed with the number of choices placed in front of them. This has always been a problem for most people - including myself - as, in most cases, another alternative pops up that provides a different experience and adds to the ever-growing pile of options. This time-consuming and confusing experience is something that has been very difficult to avoid, especially when people are changing cars so frequently. But, it is now becoming easier to decide through the rise of mobility; most notably, subscription services and car sharing that allow flexible ownership and an entirely new experience.  

Whether you desire a top-of-the-range sports car or a small electric city runaround, these new mobility services can cater to your every need. As much as they would like to think that they are the disruptors, automakers have been passengers to the evolving automotive market, clinging onto old business models that centralised around dealerships and direct sales to customers. However, they have now identified this shift in the industry and have finally started to utilise this approach and move towards new business opportunities. By embracing subscription services, automakers have opened up new profit areas that will have to be managed in a completely separate way to the linear buy-to-sell model they have been used to following. If they can achieve this, which many are doing today, the industry can work towards agile, open and enjoyable transportation within urban ecosystems. 

Yes, mobility services and subscriptions will make our cities a lot less congested and much cleaner, but it is important for these automakers to focus on the business aspect of it. Fundamentally, away from all of the environmental benefits, this new way of business will provide a source of income set to erupt over the next few years. What makes this area even more interesting is that most people today are buying vehicles that they cannot afford, through financing schemes and loans, which means that they would be more attracted to the idea of paying a set fee each month to drive whatever vehicle they want. This means that someone could hire an electric car for city driving, an SUV for the school run and a two-seater sports car to enjoy on the weekend - all within one application. It’s a win-win situation for all involved. 

Consumers are demanding more from their automakers and have developed a lazy and greedy philosophy when it comes to transportation. This has started to put a lot of stress on these businesses as dealerships must ensure that they are well stocked and can provide vehicles on demand. These mobility services will address this problem head-on, but there needs to be a new way of management from the top down in the automotive industry. For example, where do dealerships stand in all of this? It is fairly obvious that people are becoming less attracted to the idea of going to dealerships and prefer to buy or rent through online portals. Due to this, it is vital that automakers organise a suitable structure to account for this significant change, otherwise they will be tied up in a complex system that will affect their customers’ experience. 

Through a robust and agile business model, players in the industry can create a sufficient pricing structure and constantly update vehicle offerings for customers interested in subscription services. But, more importantly, it must transition from its old ways of selling as many vehicles as possible to keeping as many customers happy as possible. If this is achieved, the industry will catapult mobility services into the limelight, which will bring electrification and connected car technology along with it.  

Alex Kreetzer

Editor: Alex Kreetzer

Chief Executive: Peter Wooding

Circulation & Distribution Manager: Zoe Chapman

Production: Richard Sinfield

All rights reserved. No part of this publication may be reproduced or stored in a retrieval system without the written permission of the publishers. Whilst every care has been taken in compiling this publication, the publisher cannot accept responsibility for any inaccuracies or changes since going to press, or for consequential loss arising for such changes or inaccuracies, or for any other loss direct or consequential arising in connection with the information in this publication. The views expressed by the contributors are not necessarily also those of the publisher. Additional images Articular - freepik.com | unsplash.com      E&EO
New Mobility | Visions | Three6Zero Limited © 2018