Car manufacturers are facing a challenge that was previously felt by tech companies, who have now either learnt to adapt to the digital age or lose their industry-leading position.
For the last few decades, car manufacturers have focused on the expansion in engine technology, but Sopra Banking Software predicts that the focus on the petrol-based engine will be obsolete in the next 23 years.
As major cities look to improve air quality and aid in the fight against climate change, the technology of the future appears to focus on electric engines with fully autonomous driving.
Leasing Business - Evolution Through Technology
Nicolas Ullmo, marketing product director for Cassiopae by Sopra Banking Software, expects at first, “Significant growth in the leasing business with more and more entrants in the shared car business, especially in cities.”
The new entrants Ullmo describes are expected to differentiate on cost, but also largely on the quality of the cars and the extensiveness of non-transport related services.
“Technology must be carefully selected to facilitate external service providers rather than link to the manufacturer or the leasing company”, added Ullmo.
From Ownership to Alternatives
Sopra Steria Consulting expects that the relationship customers have with their cars will change from a framework of statutory ownership, towards shared use and pure transportation.
Already, the industry has started to see a change in the user mindset from a car that reflects our personality and requires a major personal investment, to a car that is a cost and a pain due to time lost in transit, the need to manage repairs, and the search for parking spaces.
On the other hand, companies such as Uber and GAFA, which are not and do not intend to be manufacturers, invest heavily in the automotive sector, mainly around automatic driving.
These companies have adopted new added-value opportunities developed from the mining of big data – generated from following all transport by car users, the replacement of taxi fleets, and even private city second cars.
Sopra Banking Software, Sopra Steria Consulting, and Axway expect a major shift towards more shared fleets of "pay per use" cars in cities and a shift in end-users’ attitudes. Increasingly, end users are expected to be able to perform similar tasks in their vehicles as they do at home, such as surfing the internet, but while driving.
Use of the Open Blockchain
Sopra Banking Software, Sopra Steria Consulting and Axway believe that some form of open blockchain interaction will have to be defined in order to provide a complex multi-company, new technology-enabled service. This includes offering:
Secure and instant payments from a car
Real-time interaction with service, maintenance, and repair providers as soon as the car detects when action needs to be taken
Extending GPS features to provide more reliable and responsive services
Big data support to car manufacturers on the transportation usage of their customers
Parking services
On-demand servicing of the vehicles
Conclusion
In the digital age, it is easy for companies to lose their grip of the market if they do not learn to adapt to modern needs, just look at the rise of Netflix due to its digital streaming, and the fall of Kodak due to advances in digital cameras.
In the car manufacturing industry, with increasing pressure from local and national governments to help tackle pollution and users demanding additional services whilst getting from A to B, manufacturers have begun to focus on electric engines with fully autonomous driving. This gives them the best opportunities to take advantage of the rise and developments in companies such as Uber and GAFA.