The automotive industry is currently experiencing a period of unprecedented turbulence and uncertainty. On the one hand, the convergence of emerging and disruptive technology-driven trends is driving a seismic shift in business models and changing customer expectations.
On the other, policy makers around the globe are pressuring manufacturers to cut emissions, while making sure consumers pay a premium when it comes to parking, driving or insuring their fossil-fuelled vehicles – especially in heavily congested cities and urban conurbations.
It all adds up to a considerable degree of uncertainty as to what the future holds for the industry.
One thing is for sure. The rise of the digitally connected sharing economy has already had a major impact on the sector, with new mobility services – such as car-sharing and e-hailing from the likes of Uber, Lyft and car2go– threatening to end the concept of traditional car ownership as we know it today.
With the launch of automated driverless cars on the horizon, and big tech companies like Apple, Google and Microsoft looking to take market share from traditional incumbents, how can automotive manufacturers position themselves to stay relevant in the face of such persistent and disruptive change?
Shifting mindsets to reimagine the future
The ability to adapt fast will be key to thriving in a world where new market entrants and digitalization are continually changing the rules of the game. Automotive players are already scrambling to transform themselves from product to services businesses and make the shift from a purely engineering focus to embrace customer centricity and smart mobility.
The pressure to transform and quickly monetize emerging business models is driving new cooperative alliances as companies work together to evolve their value proposition. BMW and Jaguar have already embarked on a joint venture to develop drive systems for electric cars, while Ford and Volkswagen have partnered up to develop self-driving vehicles.
Others are making even more imaginative leaps. Hackrod and Siemens PLM Software recently announced their joint vision to democratize engineering and manufacturing – leveraging IoT, virtual reality and 3D printing to enable engineers to design cars as easily as playing video games.
In a landscape populated by ever more diversified and innovative business models, knowing what will resonate with customers – and what connected technologies they’re prepared to pay for – will be the key for aligning future strategic priorities.
And that means automotive companies will need to proactively analyse the consumer preferences and choices that will ultimately impact their cars and how they engage with customers.
Harnessing experience insights to make better business decisions
With the stakes this high, gambling on what the future holds – and how buyer behaviours will evolve – is not an option.
Understanding the human experience will be critical for satisfying changing consumer preferences with regard to vehicle design and performance characteristics. Similarly, leveraging data-led insights on the connectivity needs of consumers will help automotive companies identify which forms of subscription or mobility-as-a-service options best meet customers’ needs.
Today’s forward-thinking industry players are already fusing human experience (X) data with operational (O) data to identify new or enhanced revenue opportunities. See how BMW reengineered its CX program to drive increased repurchase and return service rates as great example.
By linking live customer feedback with connected vehicle use and performance data they’re able to identify requirements specific to evolving customer preferences. For example, Toyota is leveraging its experience management capabilities to provide cars and mobility services that are closely tailored to customer lifestyles as well as the specific regional characteristics of local communities.
Taking the guesswork out of predicting the future
By gaining data driven insights into driver sentiment and intent, automotive companies are able to pivot or modify their new service offerings quickly to ensure an exact product market fit for every geography they serve.
Similarly, by capturing the expectations of different population demographics they’re able to better direct their product design and engineering efforts – utilizing the gaining granular insights they’ve gained on the infotainment expectations of Millennials, while decoding the elevated connectivity requirements of Generation Y.
Similarly, they’re better able to position their product and service propositions based on a deep understanding of exactly what pragmatic urban dwellers look for in a car – catering to their more fluid attitudes to car ownership – in contrast to the needs of those living in locations where public transport or car sharing options may be more limited.
Driving better outcomes
Utilizing qualitative driver and consumer feedback can help improve market share and wallet spend. As market barriers leave automotive players exposed to new threats and competitors, turning disruption into opportunity requires a change in mindset that includes taking a more customer-centric view.
Thinking in a fresh and creative way will depend on understanding what is really happening in the automotive landscape – and using this knowledge to change how you sell, design and develop cars, products and services. One thing’s for sure – with electric cars, autonomous driving, and connectivity set to revolutionize how the individual mobility behaviours of consumers, expect a growing movement to more specialized vehicles designed for very specific needs.
As automotive players prepare for uncertainty, exploring alternatives to traditional business model will begin with understanding exactly what customers are feeling and experiencing. At Best practices for Automotive 2019, innovation evangelist Tom Raftery will show how megatrends are transforming the lives of individuals, enterprises, and the planet for the benefit of all. You will learn why brands with customer experience strategies in action win and outperform their peers, why and how listening to customers translates into revenue, how Toyota Material Handling Inc., the largest manufacturer of forklifts in North America is leveraging marketplaces with distributor networks to improve the B2B customer experience and more. Visit Customer Experience booth for expert discussion, join a ride to the future!