05 Feb Car ownership is still relevant, but these experiences need to compete
While it may seem like a dark and gloomy picture for the future of the automotive industry, there is still a lot to be said for car ownership. OEMs face momentous and difficult decisions ahead. Expanding into new business models gives these worried OEM’s access to broader future ecosystems, but that doesn’t mean they should neglect the here and now; their current audience who still see value in car ownership and represent the lion’s share of real revenue.
It’s true that, today, many people wish they could live in more connected areas. People who spend less time moving from A to B are in the enviable position of having more time to do the things that really matter to them. Organising daily life with only a short commute is increasingly becoming a defining lifestyle and identity choice with the main motivation being convenience. This can often mean that alternative services like car-sharing, and bicycle schemes become the favoured mode of transport.
However, not everyone can choose such a lifestyle, with many still living in non-urban locations poorly served by public transport, where the car is still the go-to option for transportation needs. Even for those who can choose other ways to get around, car ownership can still be very attractive as it offers convenience, status and stability. It provides them with strong emotional and functional value, increased flexibility and gives an overall sense of freedom and possibility.
This is particularly true for the younger generations. Something we found during a recent global mobility project was that for them, the ability to own a car is the next best thing to owning a house, something that many fear they may never achieve. This is especially true for those looking to live in more convenient locations, which in turn tend to be the more expensive real-estate areas. At the same time, car ownership provided others with opportunities and moments of relief from deep routed, personal issues. For many, commuting in their private vehicle offers them the only moment during a hectic day when they can really disconnect. In this light, many people see commuting time spent in their car as an opportunity rather than a burden.
And while people recognise that other factors like sustainable living require changes to less polluting transport, this isn’t a strong enough reason itself for many people to change their mobility choices. There is an awareness that private vehicle ownership is polluting the planet, but the convenience of vehicles, and the inconvenience of alternatives mean that so far, no large scale behavioural changes have taken hold.
Our deep lying connection to the car is visible in todays technological advancements in vehicles. Semi-autonomous driving modes are becoming a regular feature within cars that are driven today, but they are not yet widely used. Vehicles that are able to self-park, or drive themselves (level 2 autonomy, slowly becoming level 3) are becoming increasingly common. There is a cautious interest in the applications of this technology. However, for most journeys and manoeuvres, people wish to remain in control and do it themselves. This lack of trust in technology and deep emotional connection with the art of driving demonstrates that the perceived collapse of the OEM’s traditional business model might not be as close as some predict.
Ignoring the now and only focusing on the future is at odds with what your current customers expect. Even the car owner who continues to purchase new models in the future will inevitably be influenced by the benefits within new mobility models and expect more and more from their current ownership experience. They will very likely expect many of the same conveniences that these new models offer. OEM’s need to consider what’s important to the car owner today that wasn’t ten years ago. Only by doing this can you truly create value-added experiences that will keep your current audience engaged and loyal. What matters in the short term is making sure you provide services and experiences that matter and appeal to those who still have a need and a passion for ownership of automotive products.
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