Mapping a route to a future success in the new automotive ecosystem

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Digitally-enabled car-sharing and ride-hailing is set to become a key driver of growth and profitability in tomorrow’s auto markets, far outstripping the profitability potential of traditional car making.

Accenture research shows that by 2030, revenues from manufacturing and selling vehicles (around €2 trillion) will be only marginally higher than they are today, and that profits from car sales will even shrink slightly (from €126 billion to €122 billion).

By contrast, revenues from mobility services are projected to soar to almost €1.2 trillion—with profits reaching as much as €220 billion. Fueled by constant improvements in autonomous vehicle technologies, global markets for mobility as a service are set to grow exponentially over the next decade.

OEMs are well positioned to build and sustain mobile services at scale: the key to success. But with nimble newcomers already besieging this emerging space, they will need new strategies and new business models to secure a lead.

OEMS face three key challenges:

Customer Expectations

Offer new mobility services that are even better than those of the new entrants currently shaping customers’ rapidly rising expectations.

Profitability

Ensure these services are profitable, and not the separate ventures that most of their mobility experiments have been to date.

Technology Integration

Integrate these new offerings with their core “build-and-sell” business by adopting business models that strike the right balance between hardware, software, and the emerging auto ecosystem.

BOLD NEW STRATEGIES

OEMs are established masters of vehicle mass production and thus very likely to dominate the manufacturing of autonomous vehicles that will turn mobility as a service into a mass market. They still occupy the critical interfaces between products and services, hardware and software. And their brands, powerful distribution networks, and customer following can help build and sustain mobile services at scale: the key to success.

But they will also need bold new strategies to bring these strengths to bear. Auto executives must make smart choices about where and how to play. They will also need to execute on these choices—and fast. New entrants are setting the pace and right now, despite their impressive car-sharing and ride-hailing experiments, OEMs are struggling to keep up.

SCALING TO SUCCEED

The key to long-term success is scale. And OEMs are in pole position to leverage it—so long as they can bolster their existing capabilities around designing and manufacturing cars, and build new capabilities around ideating, testing, and rolling out mobility and digital services. Working with strategic partners, including competitors, whose strengths complement their own will be essential: often, indeed, the only way to scale platforms and service offerings quickly—a must-have in digital business, where size matters.

NEW BUSINESS MODELS

Five new business model options could help OEMs deliver superior services that are profitable and integrated with their core business:

1. LUXURY VEHICLE MANUFACTURER 

Establishing premium brands that cater to customers who still want to own vehicles of the highest quality

2. B2B ASSET  PROVIDER 

Building, selling and servicing a new generation of “built-for-service” autonomous vehicles and delivering them to fleet providers; much as aircraft manufacturers build passenger planes for airlines.

3. VEHICLE AND FLEET OPERATOR 

Making, owning and operating all-inclusive vehicle fleets designed for an optimal lifecycle via a circular economy effect.

4. CAR MOBILITY SERVICE PROVIDER 

Monetizing the customer data generated by car-sharing and leveraging strong partners to provide additional, location-based services. This would generate new car sales leads, as well as improve the overall efficiency of vehicle use.

5. FULL MOBILITY PROVIDER 

Acting as mobility aggregators at the heart of an inter-modal ecosystem, to broaden the scope of data and how it’s used, and strengthen their grip on the user interface. Partners including public transportation providers would be fully integrated with the brand.

CONTACTS

Axel Schmidt

Juergen Reers

André Gerhardy