E-mobility – the use of electric vehicles and the establishment of a new network of players – is set to drive the automotive industry in a radical new direction. In recently commissioned research (Managing the Change to e-Mobility, Capgemini, 2012), 80% of industry executives agreed that the future of their industry lies in e-mobility and expect this change to occur over the coming five to 20 years. As dramatic as the shift from horse-drawn carriages to the car, and from steam locomotives to diesel-electric engines, it will be a journey that defines the next stage of automotive technological evolution. It will bring new, fresh players into the field and steer more familiar, unprepared names into failure.
In recently commissioned research, 80% of industry executives agreed that the future of their industry lies in e-mobility and expect this change to occur over the coming five to 20 years.
Plug-in hybrids, semi-hybrids, full-electric vehicles and battery technologies are a few of the developments arising from the emergence of the electrified powertrain. As these technologies gradually find their way into mass production and reach a state of consumer readiness, automotive companies need to reflect on where their own offerings fit into this evolving market, and how they will manage the migration of their role and products. By analysing past and present comparable shifts in technology, several critical factors in determining how successful companies weather these disruptive but exciting changes have been revealed.
History has shown that failed companies underestimated the technological changes and overestimated their own innovation capability. Furthermore, established companies, content with their current position, failed to identify the niche markets within which new technologies and competitors were emerging. Moreover, a lack of collaboration resulted in the breakdown of partnerships leading to a loss of knowledge and market access, with established companies unable to identify the customer benefits of the new technology. Companies which remained with the old technology struggled to keep their market share and disappeared as the industry leapt ahead.
Only companies that consciously adapt will maintain their dominant market position and continue to play a major role in the growth of the industry as a whole.
Automotive companies willing to recognise that their industry, even in its most basic aspects, is about to change due to e-mobility need to consider a remedy to these historical patterns, and take some critical steps. First, they should reflect on their own attitudes; every technology is replaceable and as such new structures need to be built to encourage innovation. Second, they must demonstrate a willingness to invest and seek alternatives to current technologies; almost half of company executives (according to Managing the Change to e-Mobility), believe it is likely their current systems will need to be replaced due to e-mobility. Third, they must also define the core values and role of the company to position themselves against competitors; and fourth, they must seek partnerships with new players in the e-mobility network and identify the essential value of new technology and products for their customers, whilst simultaneously implementing systems that allow for flexibility.
As the need for e-mobility becomes increasingly important, automotive companies must come to terms with the idea of integrating the car and services as part of a wider system, instead of focusing just on vehicle manufacturing. Only companies that consciously adapt will maintain their dominant market position and continue to play a major role in the growth of the industry as a whole.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Kai-Olaf Dammenhain is Study Director at Capgemini
For more information on Managing the Change to e-Mobility, click here
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