Tomorrow's automotive sector leaders will face unprecedented changes and challenges as they steer their organisations into the future.
They will need to be deeply connected to the world around them so they are truly aware of potentially disruptive current and emerging developments across the sector and the broader environment.
However, in many cases, it is far too early to distinguish between what may be temporary fads and the more substantive ideas and developments that could turn into significant trends having a meaningful impact on the sector.
Good foresight has become a critical tool for conscious leaders.
Across every part of the automotive value chain, we are witnessing many of these emerging ideas.
Here are five sector-specific sets of developments that may have the potential to drive change and disruption:
Digital and connected
- Digital transformation, the internet of things and advances in smart technologies such as robotics and artificial intelligence are blurring the boundary between the physical and virtual world.
Collectively, they could turn our cars into ‘always on’, highly connected, self-monitoring, self-managing technology platforms that can be updated as frequently as the app library on a mobile phone.
- A growing number of manufacturers are building fully or partially-autonomous vehicles.
Dramatic claims are being made about their potential to cut accident rates, improve fuel management, increase traffic flows, and reduce the number of city taxis.
Evolution of business models
- There is gradual shift taking place from seeing a vehicle as a one-off product sale to viewing it as a digital service platform, information centre, and commercial portal with recurring revenue streams.
Consumers are embracing concepts like the sharing economy with growing interest in "usership" over ownership.
Some manufacturers now offer shared ownership schemes where up to 30 customers may become co-owners of a single vehicle.
The rise of taxi services like Uber means many see their car as a revenue earning asset not a cost centre.
This creates opportunities for manufacturers to explore sharing risks and rewards with the vehicle owner.
Some suggest the future emergence of ‘self-owning’ autonomous vehicles.
This means that producers of vehicle and component suppliers would receive continuous revenues from the vehicle over its lifetime.
- A number of broader societal trends are touching the automotive world.
Again, their long term impact is very difficult to predict so we have to prepare for a range of possibilities.
For example, we are experiencing radical changes in public thinking about the need for more integrated planning of the future of mobility and the value of smart infrastructures.
The expectation is that transport systems and city infrastructures can be managed far better with lower ecological impact once the fully connected vehicle is communicating continuously with its external environment.
At the same time, a variety of ‘open source’ car design projects such as OSVehicle, coupled with the reduced complexity of 3D printed cars and electric vehicles, are bringing down the cost and time to develop new designs.
There is also growing societal acceptance of crowdfunding platforms like Kickstarter for innovation and Crowd Cube for equity raising.
Collectively, these societal shifts are enabling new vehicle manufacturers to test the market for new product concepts and raise seed funding without major initial investments.
The crowdfunding platforms are proving an effective route to raise finance and build brand awareness among target markets.
A growing emphasis on environmental sustainability is also spurring the development of green vehicles and encouraging manufacturers to think about recycling and the "cradle to cradle" lifecycle of a vehicle.
Rapidly evolving markets
- The rapid development and sizeable populations of many emerging countries are creating new vehicle markets.
Several million new car buyers enter the market each year. From ultra-lost cost vehicles, such as the Tata Nano, to extreme luxury - demand is growing.
Competition is also likely to increase as local manufacturers continue to emerge in populous countries such as China, India, Malaysia, and Indonesia.
A future-conscious approach to leadership development
In response to this ‘perfect storm’ of change on the horizon, the automotive sector is being challenged to think hard about future strategies.
New 'conscious leadership' perspectives are required to deal with disruptive news entrants, to innovate in design, manufacturing and distribution, to evolve business models and organisation designs, and to ensure effective stakeholder engagement in a fast-changing world.
Our experience is that the best managed organisations are aiming to develop leaders who are prepared for a broad range of possible developments, opportunities, and challenges and who are conscious of the possible scenarios through which these may play out.
We find that this deep future orientation helps unlock the leadership drive, imagination, and personal capacity required to create a positive future for the organisation.
Author: Rohit Talwar (pictured) is a global futurist, strategic advisor and the chief executive of Fast Future Research and Fast Future Publishing. He advises business, government and NGO leaders around the world on how to prepare for and create the future in an increasingly disrupted world.