Is the auto industry preparing to introduce a new product+service category for the future of mobility? Could software and sensing systems transform the current form factor into a commercially viable mobility-as-service solution in the years ahead?
With the recent announcements of various partnerships between auto makers like Toyota, GM, Microsoft and others seem to emerge with some compelling business models for the automakers.
First, we must recognize the lack of good options for global auto industry makers. The industry’s new vehicle and finance revenue-based business models are challenged on almost all fronts. Few doubt worldwide growth prospects as we look forward, but competition is very intense and it has become difficult to find a manufacturing-based competitive advantage (remember, ‘most cars are made by the same robot‘). Industry insiders recognize the structural challenges to managing costs and capacity utilization around combustion engine vehicles. (We still do not understand the implications of China or India unleashing their full capacity as it comes online!). The other challenge is that growth is shifting from traditional western suburban to more urban Asian markets. Let’s also not forget about servicing markets changed by aging populations!
So automakers realize that business as usual models may not keep their profits going and there is a need for more radical shifts in their cost structures and business models.
Amidst such a business climate, what if automakers explore the paradigm of creating a new rung on the mobility value chain that will likely be a combination of product plus service.What this would mean is developing new 'telematics' software and ‘drive by wire‘ control systems that assist drivers and turn vehicles into sensing devices.
The current Age of Telematics include hardware, software and services that transform the driving experience. This is the world of GM’s OnStar, Ford’s Sync and Kia’s uVo and thousands of yet to be named applications that will alter how we move within the world across vehicles that we own and access. Telematic applications for ‘connected cars’ would include: crash warning system, collision avoidance, point to point navigation, hands-free communication, adaptive cruise control, and automatic driving assistance systems (e.g. lane change assistance, braking assistance, et al). Maybe the concept of vehicle that is so connected and situationally aware that it can operate autonomously without human drivers on public roads is probably bit of a stretch of ones imagination (at the moment)!.
As entrepreneurs search for new ways to enter the market and platforms that help shift revenues from per new car sales to aftermarket upgrades and per mile software-service mobility experiences. These entrepreneurs will see opportunities around new designs based on sleek EN-V technologies. And these innovators may see software as the most effective safety strategy. They will build communication networks so that ‘connected cars’ do not crash. The way forward is not hiding increasingly distracted drivers behind bigger cars, it is transforming our assumptions about safety by increasing the human’s situational awareness and holding them accountable to their safety performance.
Some bloggers see this with some element of skepticism. What do you guys think?
With the recent announcements of various partnerships between auto makers like Toyota, GM, Microsoft and others seem to emerge with some compelling business models for the automakers.
First, we must recognize the lack of good options for global auto industry makers. The industry’s new vehicle and finance revenue-based business models are challenged on almost all fronts. Few doubt worldwide growth prospects as we look forward, but competition is very intense and it has become difficult to find a manufacturing-based competitive advantage (remember, ‘most cars are made by the same robot‘). Industry insiders recognize the structural challenges to managing costs and capacity utilization around combustion engine vehicles. (We still do not understand the implications of China or India unleashing their full capacity as it comes online!). The other challenge is that growth is shifting from traditional western suburban to more urban Asian markets. Let’s also not forget about servicing markets changed by aging populations!
So automakers realize that business as usual models may not keep their profits going and there is a need for more radical shifts in their cost structures and business models.
Amidst such a business climate, what if automakers explore the paradigm of creating a new rung on the mobility value chain that will likely be a combination of product plus service.What this would mean is developing new 'telematics' software and ‘drive by wire‘ control systems that assist drivers and turn vehicles into sensing devices.
The current Age of Telematics include hardware, software and services that transform the driving experience. This is the world of GM’s OnStar, Ford’s Sync and Kia’s uVo and thousands of yet to be named applications that will alter how we move within the world across vehicles that we own and access. Telematic applications for ‘connected cars’ would include: crash warning system, collision avoidance, point to point navigation, hands-free communication, adaptive cruise control, and automatic driving assistance systems (e.g. lane change assistance, braking assistance, et al). Maybe the concept of vehicle that is so connected and situationally aware that it can operate autonomously without human drivers on public roads is probably bit of a stretch of ones imagination (at the moment)!.
As entrepreneurs search for new ways to enter the market and platforms that help shift revenues from per new car sales to aftermarket upgrades and per mile software-service mobility experiences. These entrepreneurs will see opportunities around new designs based on sleek EN-V technologies. And these innovators may see software as the most effective safety strategy. They will build communication networks so that ‘connected cars’ do not crash. The way forward is not hiding increasingly distracted drivers behind bigger cars, it is transforming our assumptions about safety by increasing the human’s situational awareness and holding them accountable to their safety performance.
Some bloggers see this with some element of skepticism. What do you guys think?
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