What’s driving the automotive industry disruption? | #eBizTrends | Dion Chang


Earlier this year Apple announced its plans to develop a car, and Apple evangelists around the world rejoiced. The envisaged prototype is a cross between a sleek, Apple designed mouse, and a futuristic iRobot-type car, and as with most Apple innovations, it’s something you never thought you needed, until you see it.

When a tech company crosses industry borders and blurs the boundaries, you know something big is about to happen, and in this case, the disruption of the automotive industry: it’s been brewing for some time, but 2015 is the tipping point. volvo-sartre-620px

The first signs of disruption were the competing operating ecosystems that were developed for a new breed of high tech car. With the reality of the Internet of Things fast approaching, the two dominant operating systems – Apple’s iOS and Android – created in-car systems that inadvertently created two distinct camps.

Apple’s system called “In The Car” (aka iOSitC) has been aligned with: Mercedes Benz, BMW, Chevrolet, Nissan, Volvo, Jaguar and Ferrari. In the opposing corner is Android who introduced the Open Automotive Alliance in partnership with Audi, Honda, Hyundai, Kia and General Motors. What this means is that, in the not too distant future, the operating system of your particular Smartphone, could very well sway or determine the next brand of car you purchase – not to mention your home appliances.gty_google_car_kb_130201_wg

The mating dance between technology and cars has intensified over the past few years. Futuristic prototypes are no longer unveiled at traditional car fairs, but increasingly at the big electronic trade fairs like CES (Consumer Electronics Show) in Las Vegas. Another indicator is the growing number of car companies setting up offices in Silicone Valley. In America, car companies who traditionally had their headquarters in cities like Detroit, are now realising that the closer they are to the tech epicenter, the better it will be for that company’s future.

However, the marriage between technology and cars is a double-edged sword. High tech cars are one thing, they are bringing us closer and closer to the inevitability of driverless cars, but what technology enables – in terms of access to transport via car sharing schemes and “e-hailing” apps like Uber – is a curve ball that the automotive industry should be tracking very closely.BN-HG342_0305AU_P_20150305102517

The sharing economy is already starting to have an impact on global car sales. In America, drivers’ license ownership has dropped by 20% over the last ten years, as millennials feel less and less inclined to own a car as their parents did. Car-sharing schemes and environmental concerns are changing the notion of cars as status symbols. Cars are still aspirational status symbols in emerging markets but this trend reversal is becoming a growing concern in Europe and America.

In my own circle of friends the debate on whether it’s actually worth buying a car, when a combination of systems like Uber, car sharing and increasingly efficient public transport, make it possible for people move around a city. These transient costs compared to the cost of buying a new car, its maintenance, petrol, insurance, etolls, etc are being weighed up, and the evidence points increasingly to transient ownership – and these friends are not young millennials.Google500KmilesLexus

Driverless cars are a near reality, and when these cars are eventually incorporated into the sharing economy another disruptive wave will hit this industry. I’m not saying that people’s lust for cars will disappear, but what happens when we reach the tipping point of being able to use them, but don’t necessarily have to own them?
Dion Chang is the founder of Flux Trends.

For more game-changing business trends visit: www.fluxtrends.com


Dion Chang in conversation with eBizRadio’s Nick Snow

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