Evolving Consumer Choices Transforming Automotive Landscape

The automotive industry, in the last few years, has undergone a significant transformation with leading vehicle manufacturing players foraying into the mobility solutions segment. This transformation has been fuelled by a host of factors, like evolving consumer choices, advancements in technology, and enhanced awareness of the necessity to reduce carbon footprint.

While in the past, automotive players focused mainly on designing and assembling cars, trucks, and several other types of automobiles, in recent years, there has been a growing recognition that mobility is about more than merely the vehicle itself. Mobility incorporates the entire spectrum of services that allow individuals to move from one place to another, including public transportation, ride-sharing, and other formats of on-demand mobility.

One of the fundamental drivers of this transformation has been evolving consumer preferences. Consumers today are increasingly inclined towards mobility solutions that are convenient, budget-friendly, and sustainable.

They prefer to move around effortlessly without having to own a vehicle or stress about the annoyance of parking and maintenance. This has resulted in significant growth of ride-sharing services like Uber and Ola, as well as the adoption of electric bikes and scooters.

Also, rapid advancements in technology have paved the way for vehicle manufacturers to deliver a wider range of mobility services. For instance, connected and autonomous vehicles have made it feasible to deliver on-demand transportation services that are more efficient and dependable than conventional public transportation.

Furthermore, a flood of smartphones and other mobile devices has made it conceivable to incorporate transportation services with other elements of individuals' lives like profession, entertainment, and socialising.

The transition towards mobility solutions has also been pushed by a surging understanding of the necessity to shrink carbon footprint and manage climate change.

The transportation industry is one of the biggest sources of greenhouse gas emissions, and vehicle manufacturers have been investing heavily to find alternatives to lower the carbon emissions of their products.

This has resulted in an increased focus on producing electric and hybrid vehicles, as well as a more significant emphasis on enhancing the efficiency of conventional fuel-powered vehicles.

Today leading automobile manufacturers are collaborating with ride-sharing services, designing connected and autonomous vehicles, or supporting other formats of mobility technology.

For instance, Tata Motors in the last few years has made substantial investments in the manufacturing of electric vehicles. The automobile giant has also inked partnerships with different ride-sharing services in India like Uber and Ola. In 2019, the company declared the establishment of a joint venture with Goldstone Infratech to design and manufacture electric buses for the Indian and global markets.

Another leading vehicle manufacturer that has made significant inroads into mobility solutions is Mahindra & Mahindra. The Mumbai headquartered company has invested extensively in the development of electric vehicles like the eKUV100 and has also unveiled Glyd, a ride-sharing service.

The automotive industry at present is also leveraging technology applications at numerous touchpoints to garner, record and assess colossal amounts of customer information. This data allows the industry to obtain real-time data-driven results and utilising this, vehicle insurers can now deliver usage-based insurance offerings that evaluate factors like driver behaviour, location, distance travelled etc.

Citing the scale of digital transformation and penetration of smartphones across the world, it is evident that the automotive industry will witness multifold growth in the adoption of mobile telematics systems in the coming years.

Furthermore, data analytics has allowed product and service providers to garner detailed insights into consumer behaviours and acclimate their operations accordingly. Cutting-edge analytics tools today are identifying the right match between consumer and experience, depending on the level of personalisation offered.

However, the move towards mobility solutions comes with its own set of challenges. It demands vehicle manufacturers to design new competencies and expertise outside their conventional areas of strength.

This may include recruiting new talent on a massive scale, collaborating with other organisations, or taking over new companies that are already focussing on mobility technologies and services.

Also, the market for mobility solutions is still in a nascent stage and there is huge uncertainty about how it will mature in the coming times. Vehicle manufacturers need to be ready to swiftly adapt to changes and to create new products and services that meet the evolving requirements of consumers.

While it would be too early to predict how this market and associated trends will evolve, the transformation of vehicle manufacturers into mobility solutions firms will continue to gain momentum in the coming years.