Future of the auto industry

As I walked around the grand unveiling of the Paris Motor Show, however, 'solutions' didn't seem quite the right word. The concepts and ideas I saw are not the answers to the question of what the auto industry's future will look like. In reality, they simply prompt a lot of new questions. Manufacturers need to think long and hard about what the answers will be:

Can the traditional product lifecycle survive?
First of all, there's the sheer acceleration in the arrival of new models and products with an ever-increasing range of body shapes and concepts on offer. It seems that the auto industry must respond to consumers who are accustomed to shorter and shorter product lifestyles: a new mobile phone every year, a new fashion collection every few months, a software update every few weeks. But this explosion in auto diversity and consumer choice raises serious questions about existing business models. Can a manufacturer still realistically plan for a seven-year product lifecycle? The fact that VW recently announced that it will reduce the lifecycle for some major models to five years suggests that in a number of cases the answer might be 'no'. But can module structures, assemblies and business plans make the necessary adjustments to a faster-revolving auto world?

Is connected car technology a differentiator?
The connected car dominated proceedings at Paris, claimed by almost every manufacturer as a key competitive advantage - and evidence of just how effectively future-proofed their brand is. The connected car will transform both the driving experience and the nature of the auto industry. Yet at the same time, the ubiquity of connected technology begs the question as to how it can be developed into a differentiator.

The challenges are two-fold. First, the speed with which connected technologies develop seems likely to settle the long-running debate as to whether manufacturers should be developing their own hardware, or integrating with established smartphone platforms. A vehicle that's on the road for several years cannot hope to keep pace with consumer expectations, and the integrated route therefore seems inevitable. This means that all manufacturers will converge on a similar connected car offering based around supporting Apple, Android and other operating systems effectively. The second issue involves the constraints that will inevitably be placed on the connected car by safety requirements. A human driver only has so much attention to go around - and this constrains the range of applications that connected cars can safely offer.

What performance means in a hybrid world
With every single manufacturer unveiling a hybrid model at the show, the shape of the industry's response to the carbon challenge seems increasingly clear. But in an increasingly hybrid future, can driving experience still be a differentiator for brands? Deprived of the distinction between different numbers of cylinders or fuel injection systems, not to mention the much-loved sounds of their signature combustion engines, brands need to develop a new vocabulary that can distinguish vehicle performance.They need to convince consumers that their version of hybrid technology is different.

The big questions for brand marketers
The future for auto brands seems to be rapidly converging around similar driving and in-car experiences. At the same time, manufacturers are seeking to maximise volumes by developing vehicles for every conceivable customer niche. This puts brand managers under increasing pressure. Can they stretch their brands effectively to cover an exploding range of models that travel further from their original heritage? And can they do so when the performance characteristics that could once define their brand are under threat?

The author is Juergen Korzer, global partnership director at TNS Infratest. Re-printed with permission.
Link: http://blogs.tnsglobal.com/ tns_automotive/2014/10/the-paris-motor-shows-cloudy-crystal-ball.html