Auto “Mobility Solutions”, Paranoia Or Rationality?
“The automotive sector may need to consider moving from using a pure product ownership model toward providing a range of transportation services”
The automotive industry is understandably wary of being blindsided by some overnight technology sensation, but that doesn’t mean it has to take on board every crackpot theory.
“Mobility Solutions” is the fashionable drumbeat from the world’s leading automotive manufacturers, likely softened up by smooth talking consultants spreading fear and confusion, and sensing paranoia.
“The old, simple idea of making the best possible cars and selling them for the best possible profit is dangerously outmoded,” is the mantra.
If the traditional auto companies don’t step up to this new challenge, new entrants will move in and cream off the easy money, the consultants say.
Typical, is this recent advice from consultants McKinsey.
“The automotive sector faces a future that could be fundamentally different from its past and may need to consider moving from using a pure product ownership model toward providing a range of transportation services,” said the report, called “An integrated perspective on the future of mobility”.
Dial one up
This is all inspired by technology developments including Internet based connectivity for cars, the long-awaited and imminent electrification, and the probably distant dream of autonomous, or computer-driven cars. This vision would have us all forsaking ownership of cars in favor of simply dialing up one when we need it. But if you’re thinking of turning your garage into an extra bedroom and letting it out, you may be acting a little prematurely.
The development of cities will also shake up the industry as they become more snarled up with cars and people. Private cars will be banned in cities and eventually will only be used by autonomous ones. Public transport will be almost mandatory. Amsterdam, Singapore and Stockholm are always at the center of talk about such developments.
Technology will make cars much more affordable and travel could accelerate by up to 50 per cent by 2030, but the number of cars would remain about the same because of the significant increase in sharing and much higher use. McKinsey said by 2030, shared vehicles could account for about half of passenger miles travelled.
In the face of this smooth persuasion, it is worth remembering that there are some underlying givens in the automotive world, which aren’t going to change anytime soon. People love cars and the individual freedom and mobility they provide. There’s no way in reasonably good times, they will lend out their pride and joy, even for money. If they need a car for a few days, they’ll rent one. If they need wheels for an hour or two in the city, they’ll hail a taxi, or jump on the bus. The big car companies have simply reinvented this old concept, it seems to me. But as soon as the economy gets back to some kind of even keel, normal service will be resumed.
Cheap old car
After the Great Recession, a lot of unfortunate young people found it difficult to get jobs, and for the first time in generations couldn’t afford even a cheap old car and had to make to do with public transport.
This dilemma was reflected in surveys, which declared young people had fallen out of love with cars, and wanted something different. Some of us suspected that this was really a form of rationalization from those starting out knowing they couldn’t afford a car, and putting the best face on a depressing situation. But the idea that young men would take their first date on a bus ride never made sense. As for car sharing, or short-term city car rental, this might make sense in big cities for cash strapped students, but will never, surely, make it into the mainstream.
And yet all the big car manufacturers have been rushing around bleating sociological “solutions” jargon and investing good money in firms reinventing the taxi, and setting up firms in to Car Sharing and Shared Mobility. ZipCar and Mercedes Car2Go are at the forefront of this, and ride-hailing, otherwise known as taxi firms, with fancy names like UBER, Lyft, Juno and Didi Chuxing of China. VW has set up Moia as a mobility services division. Even before they’ve really got started, Car2Go and BMW’s DriveNow have reportedly combined, the better to fight Uber. Mercedes already has MyTaxi and Moovel, while BMW has ParkNow and ChargeNow. U.S. giants are doing the same thing. Some cynics think these schemes aren’t really serious, but exist solely for these companies to dump unsold electric cars.
Four per cent use
A recent report from investment bank Morgan Stanley calculated that cars are only used for about four per cent of their lives.
“The world’s $20 trillion car fleet achieves only four per cent utilization, leaving 8.4 trillion hours a year not used. What a waste,” It said.
Now in rational world, that makes undeniable sense. Everyone with an expensive set of wheels sitting on their drive-way knows it makes sense.
Are they going to take any sensible decisions to turn that 4 per cent close to 100 per cent?
No chance, barring economic catastrophe.