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The evolution of the motor show circuit

Megatrends examines the changing role of the motor show in today’s automotive industry. By Freddie Holmes, Megan Lampinen and Michael Nash

For decades, motor shows have been the source of excitement, the place for vehicle manufacturers to launch new products and spectacular concept cars, for executives to make bold claims and deliver key messages, and for the public to get up close to their dream cars in a glamorous setting.

However, as marketing strategies have evolved from pulling back the wraps on press day to running tireless online campaigns that reveal almost everything about the car – even the car itself – weeks ahead of a motor show, a shadow of doubt has begun to fall over the benefits of the traditional auto show.

The presence of OEMs and suppliers at events like the Consumer Electronics Show (CES) in Las Vegas and Mobile World Congress (MWC) in Barcelona has grown considerably during recent years. At the same time, vehicle manufacturers and other leading industry players have begun questioning whether attendance at traditional motor shows meets their requirements as they seek new and better focused ways of promoting their products and offerings.

The number of major motor shows, their size, and the cost of attending, leaves OEM budgets and human resources stretched

A variety of reasons can be attributed to this shift in focus, one of which is the changing nature of the automotive industry itself; as the major OEMs shift their focus from building and selling cars to becoming mobility providers, and business models evolve from ownership to usership as the influence of consumer electronics products and services works its way into mainstream cars, so vehicle manufacturers know they too need to evolve to remain relevant.

Motor shows still present OEMs with a perfect platform to launch their vehicles; increasingly, however, those same OEMs are looking to specialist shows to promote the technology inside their vehicles. In addition, the number of major motor shows, their size, and the cost of attending, leaves OEM budgets and human resources stretched. Smaller booths at specialist shows enable OEMs to deliver their messages without being drowned out by the competition, and often to a broader, perhaps more mainstream audience.

A shift of focus

Ford was one of the many OEMs that opted for performance and luxury over green technology at the 2016 Geneva show

Ford was one of the many OEMs that opted for performance and luxury over green technology at the 2016 Geneva show

“The motor show circuit is definitely changing,” a Ford spokesperson told Megatrends during the 2016 Geneva Motor Show. “Some big names are deciding not to have a presence at some of the largest shows in the world, which is reflective of a declining tradition.”

The OEM has confirmed rumours that it will not be exhibiting at the 2016 Paris Motor Show: “It wouldn’t work for us in terms of timing for product launches,” a Ford spokesman told Megatrends. “We’re going to take a different approach this year compared to what we’ve done in the past.” He continued by suggesting Ford would have a considerable presence at the 2016 Frankfurt Motor Show (IAA).

Discussing the 2016 Geneva Motor Show, the OEM’s spokesman referred to the number of high performance vehicles on show, as well as luxury vehicles and SUVs. “Geneva was once dubbed as a show for green cars,” he recalled. “But that has changed – our exhibition, for example, revolved around the Vignale brand, which has been steadily growing in strength across the continent.”

Some big names are deciding not to have a presence at some of the largest shows in the world, which is reflective of a declining tradition

And it wasn’t just Ford that decided to go with luxury and performance over green and clean at the 2016 Geneva Motor Show. Volvo, Aston Martin, Bugatti, Lamborghini and Maserati were out in force with luxury SUVs or high performance vehicles.

Are there some underlying factors that have caused Geneva to stray from its green roots? “Maybe after so many years of focusing on green tech, the industry is looking for an opportunity to showcase other things to bring a bit more buzz and excitement,” said FISITA’s Paul Mascarenas. “I’m not saying green is out, but some of these new vehicles are really exciting.”

Mercedes-Benz E-Class in Las Vegas

The new Mercedes-Benz E-Class appeared at CES 2016 in Las Vegas, four days ahead of its official world premier in Detroit

Mascarenas, currently President as well as Chairman of the Executive Board of the umbrella organisation for national automotive engineering societies around the world, told Megatrends he believes that many of the vehicles on show at today’s motor shows will have a hybridised powertrain, for example, but “this is not the focus of the car. The Acura NSX has a hybrid powertrain but it’s never really talked about. Instead, the focus is on the styling, the driving experience and performance of the vehicle.”

Mascarenas added: “Several OEMs are now talking about things they’re doing outside the traditional vehicle space, which is important because it is indicative of an industry collectively recognising the macro trends like population growth, urbanisation and congestion, and the need for the industry to evolve over time to something that is less dependent on individually-owned vehicles and more of a mobility or transportation-as-a-service type of model. Fortunately, it doesn’t look like an industry that is getting left behind.”

This was echoed by Christopher Preuss, Senior Vice President, Marketing and Communications at Delphi. In an interview at CES 2016, he said: “We hear a lot of talk suggesting that this is the beginning of the end of the traditional auto industry,” he explained to Megatrends. “But I don’t think that it’s realistic. The original role of auto shows was to sell vehicles to customers, and I don’t think that relevance has gone away one bit. It’s still a very important part of the industry’s ability to reach customers.”

However, he believes that events like CES and MWC will be critical to OEMs as the nature of the automotive industry evolves. “I think this lends credence to the idea that the automotive industry is no longer just about transportation,” he said.

Electronics puts the spotlight on suppliers

Chevrolet Bolt 2017 at CES 2016

Chevrolet used CES 2016 to unveil the production version of the Bolt EV, a week ahead of the 2016 Detroit Auto Show

Once only seen at the back of the party, suppliers have certainly risen in social status at motor shows. No longer overshadowed by their OEM customers, large – and growing – Tier 1s are now firmly on the guest list.

One reason behind this has been the exponential rise in demand for vehicle electronics and luxury in-vehicle traits, such as connectivity, autonomous driving and premium interiors. While the OEMs ultimately get the bragging rights, much of their success is down to the suppliers, which develop the products in the first place.

­­Lars Reger, Chief Technical Officer of chip manufacturer NXP, told Megatrends during CES that times were changing. “This convergence [of industries] has imploded… This is the Car Electronics Show and not the Consumer Electronics Show any more.” All the European Tier 1s and OEMs could be seen on the show floor, he suggested, and many of them make use of the stage to announce new technologies. “For us, where in 2008 we had been there mainly for car radio purposes, it is now very strongly advanced driver assistance systems (ADAS) driven,” explained Reger.

CES has never been more highly attended by automotive OEMs and their adjacent suppliers

Taking place just days before the 2016 North American International Auto Show (NAIAS) in Detroit, Reger observed that CES – which is not an automotive event – had in fact drawn much of the attraction away from one of the key events on the global automotive calendar. CES saw GM launch the Chevrolet Bolt; Mercedes-Benz, too, used the event to show its all-new E-Class, ahead of its otherwise official global debut in the Motor City. Speaking from the Detroit show, Mike Richardson, Executive Board Director, Senior Vice President and Strategy Officer at Nexteer, noted that “CES has never been more highly attended by automotive OEMs and their adjacent suppliers.” Also at CES, Johannes Roters, Chief Executive of Yanfeng Automotive Interiors, remarked that the company was “in the middle of the other suppliers” with peers such as Johnson Controls, Continental and Faurecia “in the neighbourhood.”

SEAT SAP and Samsung joint venture

At the 2016 Mobile World Congress (MWC) in Barcelona, SEAT, Samsung Electronics and SAP created a technological alliance to develop future connected car projects

Looking at the big picture, Roters believes that the auto show remains the platform for OEMs to demonstrate “new products, new trends and new directions,” but pointed out, “The auto industry also has a strong supply industry. You have to be here too as a strong supplier if you would like to support them [the OEMs] globally.”

Describing auto shows as “a meeting point” and “a beautiful opportunity to exchange and talk about specific trends,” Roters observed that the industry is changing. In order to keep up with this change, suppliers can no longer afford to take a back seat at auto shows. “Google and Facebook would like to enter this business, and that means things are happening. A lot of changes are in front of us, and so it’s a good opportunity to stop and to look at all the products and new innovations here. As a supplier, you should be part of this,” he affirmed.

Weeks after automotive industry announcements from Las Vegas, Barcelona became a source of automotive news; partnerships were announced at MWC between SEAT, SAP and Samsung, and between Visa and Honda on payment; Accenture and SEAT announced a partnership on car-to-home connectivity, car status alerts, and a driver behaviour monitoring capability; and Qt partnered with Harman, with Qt providing Harman with leading application and UI framework for the creation of connected, personalised, adaptive and secure vehicle infotainment systems.

Lifestyle events
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Toyota Setsuna exhibit at Milan Design WeekLifestyle events represent an alternative approach to the traditional motor show for some brands. Like motor shows, they offer pivotal brand exposure, but they also reach a brand new group of people. Ford of Europe Design Director Chris Bird commented that design fairs, especially in Europe, are gaining increasing interest from automotive players. “The Milan fair really captures a lot of attention from all areas of design.”

Milan’s Salone del Mobile began as a furniture design show but today attracts the likes of Toyota, Lexus, Mini, Jaguar Land Rover, and many others. What’s the draw? Kenji Tsuji oversaw Toyota’s Setsuna concept vehicle at this year’s event. As he explained to Megatrends: “As a company, we gain in three ways from attending an event like this. It gives us a chance to get feedback from an audience that is educated in terms of design and style.” Notably, this audience is often completely different from the one targeted at the Frankfurt or Tokyo shows, for example. “It exposes these unprecedented ideas to an audience who might not discover us at motor shows or in the automotive press,” he elaborated. And finally, with many opinions and evaluations from various perspectives, it pushes us as designers to think in new ways and enables us to stimulate future vehicle development or concept making.”

Toyota’s Lexus brand had an active presence at both this year’s Geneva Motor Show and the Milan Salone Del Mobile. Alain Uyttenhoven, Head of Lexus Europe, touched on the different benefits from both approaches. As he told Megatrends: “Both events play an important role in exposing the brand, however they have a different nature and as such attract a different public. The Geneva Motor Show is primarily attended by automotive media and customers interested in purchasing vehicles. The Milan Salone, on the other hand, is attended purely by people interested and specialised in design and lifestyle. Hence, the messages conveyed at both events have to be adjusted to the different nature of the public and the events themselves.”

Design fairs, especially in Europe, are gaining increasing interest from automotive players

At Geneva, Lexus directs brand focus through its products, design and technologies. At Milan Salone, it presents the brand by means of art and artistic objects. “Both types of event have their role in our communication despite their differences,” Uyttenhoven explained. “Obviously an event like a motor show is kind of an ‘old playground’ for all automotive brands. Lifestyle events such as Milan Salone are not so obvious for an automotive brand yet. But more and more we are trying to occupy this territory for Lexus.”

To remain relevant and reflect the changing nature of the auto show, event organisers have begun to incorporate aspects of specialist shows into their own events. At the 2015 Frankfurt motor show (IAA), Halle 3.1 was dedicated to the New Mobility World; the 2017 Detroit Auto Show will feature a similar exposition, Automobili-D. The idea at both is to offer a dedicated exposition for OEMs, suppliers and tech start-ups operating in the areas of autonomous driving, connected car technologies, e-mobility, mobility services and urban mobility.

The industry’s love affair with – and dependence upon – the traditional auto show is changing

But fail to offer the vehicle manufacturers what they want, and they will stay away. No auto show features every OEM, but as the Mid-America Trucking Show discovered in 2016, things look very different when all the OEMs decide to pull out. Furthermore, such was the truck industry’s desire for a US show that better reflected the needs of the OEMs that an entirely new show was created, starting in 2017. The inaugural North American Commercial Vehicle (NACV) Show will take place in September 2017 in Atlanta, organised by Deutsche Messe subsidiary Hannover Fairs USA (HFUSA), and Newcom Business Media.

Clearly, the industry’s love affair with – and dependence upon – the traditional auto show is changing. But falling out of love with the concept? That’s less clear cut. It’s difficult to imagine an auto industry coping without the framework of the traditional auto show. And the many thousands of visitors who pass through the gates of the big shows suggest there’s a demand for such events. The OEMs have to work to make those shows. The question is, can the OEMs make the shows work for them?

This article appeared in the Q2 2016 issue of Automotive Megatrends Magazine. Follow this link to download the full issue.