Could tech companies become automakers?
Over the last years news that Facebook, Apple or Google want to introduce their own car on the market broke several times. Today we are constantly online with our smartphones connecting with people and interacting with the web. Why shouldn’t the companies which make this possible also let you go online while driving or even in the future maybe while being driven?
Due to the big shift from the combustion engine to electric vehicles seen across the whole industry, the mechanical complexity of a car massively decreases whereas the software technology is dominating today’s development of cars.
Four different outcomes
These changes could require a big change in strategy in the automotive industry. The management consultancy Deloitte sees the main distinctive marks being the capabilities of cars and the balance of Power between OEM’s (OEM = Original Equipment Manufacturer; for example Mercedes-Benz, Ford or Toyota) and Technology companies.
If OEM’s fall into the role as suppliers but stay up to date with the technological possibilities of cars, the industry will evolve into Hardware Platform Providers. On the other hand staying below technological possibilities will make the industry fail and be left aside as The fallen giant.
But OEM’s could also take in the role as dominators of the automotive industry. If they don’t keep up with new technologies their position will be held up as stagnant car makers. Whereas using all the capabilities a car offers todays car makers could redefine themselves as data and mobility managers.
In which direction the strategic shift will go depends on a lot of variables defining the future of mobility. How will we use our car, will we want to own it etc.?
Why is this relevant for the Generation Z?
The Generation Z has new and different expectancies of a car than the generations before. Connectivity is one of the most important aspects. If we sit down in a car – ours or not – we want to plug in our phone and directly see all our personal apps, music, routes, calendar etc. This gives the car an individual character which is very important for our generation. A car should reflect the personality of the driver and we want to identify with the brand and being proud of it in all aspects – for example the design but also the ecological behavior of that company. A car isn’t seen as pure engine anymore. It rather is a mode of transportation. Exact horsepower and other mechanical features move into the background. This is not the unique selling point (USP) of a Gen Z’s car anymore. It is rather the message that is been sent out through the car and the simple connectivity which are in the focus of Generation Z drivers.
What does this mean for the automotive industry?
I would argue that the OEM’s are not dead but they definitely need to adapt to a new costumer base with changing wants if they don’t want to be the fallen giant being squeezed out by tech companies which have a better understanding of the needs and wants of the new generations. Evolving as Data and Mobility Manager while creating designful cars with character will be essential for the industry to stay in the position they had held over the last decades. The automotive industry has bright minds and a rich know-how which they should use together with promising start-ups to create cars the Generation Z will still want to buy in the next years.
Written by: Maxime Schönberg