How Uber will determine BMW car sales

Tremendous change is coming to the automotive industry. 

home-whereToday, cars are created for drivers and marketed to the end consumer. The introduction of autonomous cars will fundamentally shift who buys cars and how they are designed.

As Dan Neil writes in the Wall Street Journal: “Within a generation, automobiles will be endowed with what’s known as Level 4 autonomy—full self-driving artificial intelligence for cars—which will not so much change the game, as burn down the casino.”

“Autonomy will make it possible for unmanned automobiles to be summoned, via an app, to your location. And not just any passing tramp steamer, but exactly the vehicle you need for the occasion, cleaned and fueled, for as little or as long as you need. When you’re done—poof!—it will go away. As a result, Dan believes that “Americans will look back on pre-autonomy like the age of Casio calculators and DOS prompts”.

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Dan also reckons that “rates of ownership will decline, (and become) an artifact of an era of hyper prosperity and reckless glut. Twenty-five years from now, the only people still owning cars will be hobbyists, hot-rodders and flat-earth dissenters. Everyone else will be happy to share.”

In such a world, who buys cars and who are they designed for?

First, it seems likely that tomorrow’s car unit sales will be determined by ride sharing services such as Uber. The consumer’s preference within the app, will be the main driver of unit sales, as car sharing services become the main ‘distribution channel’ for car manufactures.  (See mock up of future Uber app).

Second, if consumers stop having cars in their driveways, exterior design might become less important. Without the pride and joy of getting into your own beautiful car, why does it matter how the outside looks? It seems that interior design, and comfort will become of paramount importance.

Today’s car manufactures are building cars for individual drivers. BWM’s mission statement underlines that these companies will need to radically shift their thinking. Creating the  “Ultimate Driving Machine”will not help BMW to stay relevant in 30 years from now, when there is no driver left.

Car companies must become services companies that provide the perfect transportation experience. These services might entail comfort, safety, health (such air filters for polluted urban areas), and entertainment. One cannot help but wonder if a car company in 100 years will be reduced to a service package on a standardized chassis. Perhaps consumers might even mix and match, by ordering a pick up that contains the BMW entertainment package, paired with the Mercedes comfort option.

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One thing is clear, if tomorrow’s cars are not designed for end consumers, existing car companies will need to adjust.

Perhaps Tesla and Faraday Future, who were born in Silicon Valley stand a better chance at adopting to this brave new world

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