Auto Manufacturers March Toward Customer Centric Mobility

In the past decade, the auto industry has transformed a lot with major players collaborating and merging with each other to harmonize the economy of scale and have an amplified footprint in the geographies that were previously uncharted. There are numerous examples of such collaborations. Toyota & Suzuki, for instance, who have partnered together to explore each other’s strength in the fields of technological development, vehicle production, and market development¹. With sharing of technologies, platforms, sales channels, etc., the industry still strives to add more revenue streams to make local operations more profitable. And for a capital-intensive automotive industry, an additional source of revenue is always welcomed.

The Automotive Landscape

Currently, most of the major auto players are product-oriented and by and large generate revenue by either producing vehicles or providing aftersales services to their customers. However, with ride-sharing and ride-hailing services, it has become hard for manufacturers to attract and retain consumers. The proliferation of these hassle-free services has caused consumers to move away from owning vehicles and consider vehicles only for the outcome, i.e. Point-to-Point Mobility.

Why OEMs should think about mobility services

Mobility services are expected to be a mainstream business strategy once autonomous vehicles become commonplace. There are various studies that validate this claim. One such recent study conducted by McKinsey estimates that by 2030, 1 of 10 cars would be sold as a shared vehicle and this trend could create a market for fit-for-purpose mobility solutions². Per a research study conducted by Accenture, mobility services are projected to soar to almost €1.2 trillion³. These services are poised to open a myriad downstream opportunities such as Fleet Operations, Personalized content services, and e2e Mobility as a Service. Data is identified to fuel this transition of OEMs from being product-focused to become more services oriented. Many manufacturers have already started to future-proof themselves by investing in ideas such as data aggregating platforms and IoT technologies that would help them monetize the assets that they sell.

The Dimensions of Mobility Services

Consumers have already started to advance toward intermodal travel chains. Manufacturers, too, can embark on this journey by positioning themselves in one or more of the following dimensions:

Fleet Mobility Service Provider – Provide efficient fleet services to ride-sharing and ride-hailing providers. Services span across operational parameters, health tracking and fleet management.
Data Aggregator – Push personalized content to fleet consumers and individual customers. Leverage data-as-a-service model for in-vehicle services (infotainment), vehicle data (Maintenance), Vehicle2Infra/Vehicle2Govt (parking, charging, tolls, etc.) and other services (advertising)
Micro-Lessor – Manufacturers can also earn additional revenue with segmented ownership or short-term leases.
e2e Mobility Service Provider – Provide integrated mobility services through own vehicles or incentivize 3rd party service-providers to offer services using OEM manufactured vehicles.

Conclusion

With a product-centric approach, auto OEMs are focussing on factors such as technical gaps, market know-how, operational knowledge, etc., while looking to collaborate with other manufacturers. However, to provide a seamless travel experience to customers and sustain it, several types of service providers will need to work together. And going forward, a service mindset will be essential to lay down collaboration strategies.

References

1) https://economictimes.indiatimes.com/industry/auto/auto-news/toyota-suzuki-take-cross-badging-route-in-india/articleshow/63540256.cms

2) https://www.mckinsey.com/~/media/mckinsey/industries/high%20tech/our%20insights/disruptive%20trends%20that%20will%20transform%20the%20auto%20industry/auto%202030%20report%20jan%202016.ashx

3) https://www.accenture.com/in-en/insight-mobility-automotive-ecosystem

About the Author

Prateek Chowdhry

Senior Consultant – Manufacturing Digital Practice

Prateek is an MBA graduate, with over 5 years of diverse experience in automotive product development & business development for digital solutions. He is responsible for building the opportunity pipeline and enabling sales for "Connected themes" for manufacturing accounts. Prateek was also instrumental in conceptualizing the Connected Commerce Solution. He was recognized for his special contribution toward Digital Practice Building for the Manufacturing BU. Prior to Wipro, Prateek has worked in R&D of Connected Cars & Augmented/Virtual reality products, with various Auto Tier 1 Suppliers.

Service Offerings

Client Themes

Service Offerings

Client Themes

Our Global Presence Global Site

Our Global Presence Global Site

Our Showcase Pages Locations

Auto Manufacturers March Towards

Customer Centric Mobility

About the Author

Service Offerings

Industries

Digital

HOLMES

Innovation

Contact Us

About Wipro

Location

Leadership

Investors

News and Events

Blogs

Partner Ecosystem

Careers

Sustainability

Contact Wipro