After more than a century, the pioneering spirit that has defined the auto sector remains intact as another first is playing out in real time. In the short term, this includes safely returning auto plants and dealerships to work against the backdrop of an unprecedented pandemic.
And longer term, offering the economy a new reality through the introduction of mobility services.
While the world looks very different than it did some three or four months ago, the fundamentals of leaning toward mobility have not changed.
Four megatrends — connectivity, autonomous, sharing and electric driving — were already steering the global auto industry toward a mobility services transformation, although now it may be on a delayed timeline.
In the meantime, while COVID-19 has created new challenges for the industry requiring automakers and dealers to reset ways of working and selling vehicles, industry innovation and tenacity are still very much alive.
As the reality of COVID-19 set in, automakers and dealers didn't shrink from the news but rather, seemingly overnight, adjusted their business to the situation in innovative and creative ways. Many offered 0 percent down and/or deferred vehicle payment plans, added online car sales to their Web platforms and launched vehicle home delivery service.
When it's possible to transform the industry into a mobility services market, they may want to consider integrating some of these practices into mobility services business models.
But when the inertia toward mobility engages again, the key challenge that existed before COVID-19 will remain: how to achieve growth in a radically different automotive market. Automakers and dealers will still need to generate profits from a range of mobility services and, most important, thoroughly understand those at the center of revenue generation — a highly diverse customer base.
While COVID-19 has impacted how the auto industry operates, the same innovation and ingenuity the industry is applying to revive and thrive will be needed to succeed in the age of mobility. And of the methods adopted to sell cars today, online car sales will likely gain more popularity in the future. Millennials also are expected to play a significant role near term and in this new market. They are a generation comfortable with digital technologies that can aid the sales process.
This suggests that in addition to automakers and dealers offering a traditional experience, there will be a range of business models needed. There are three that can help when a mobility services market surfaces.
1. Online car sales: Whether in today's auto market or tomorrow's mobility services world, patronage of this option will likely grow. And businesses such as auto dealers now have more time to fine-tune their Web sales model and significantly ramp up their digital presence across all channels to be ready for future digital customers.
2. Platform business models: To satisfy the surge in customer demand for Web shopping, online platforms are designed to help auto companies, dealers and private sellers market their new and used vehicles.
Consumers can browse available offerings or choose their preferred vehicle model and then receive customized offers from partnering dealerships.
Such platforms can provide a cost-effective way for automakers and dealers to reach a wide customer base and provide superior sales experiences.
3. Vehicle subscriptions and sharing: The vehicle subscription model allows customers to pay a recurring monthly or quarterly fee, giving them access to one or several models that they do not own but still have at their disposal.
Since the notion of mobility surfaced, the auto industry has undergone a range of evolving stages — from early exuberance to cautious pragmatism to guarded optimism. The arrival of COVID-19 has added new challenges to the journey.
But just as imagination, hard work and perseverance have resulted in a robust global industry, those same attributes will help car companies prevail against this time of uncertainty and continue on the road to mobility.
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June 29, 2020 at 11:00AM
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Auto industry still driving toward mobility - Automotive News
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