The challenges that will transform the automotive customer experience
- 6 mins read
Published on Monday 5th August 2019
The automotive industry is in a state of complex transformation. Where previously manufacturers have competed with each other primarily on functionality, style and comfort; lately the marketing narratives have become far more diverse, with emphasis on innovation concepts including electrification, automation and mobility as a service, it seems that every manufacturer is trying something different in order to stay ahead of the competition.
In this post, we’re going to focus on the potential impact of some of these changes on the overall customer experience, what it could mean for the industry in the future and where great gains through innovation could be made.
Automation - To drive or be driven?
Autonomous vehicle business startups rake in the majority of auto tech funding, claiming over 70% of the roughly $5B invested in auto tech startups in 9 months of 2018. (According to CB Insights Data). One count recently highlighted more than 46 companies that were investing in autonomous technology including familiar brands like Audi, Volvo and Mercedes. Then there are tyre companies, truck companies and even energy and tech giants too. There is tremendous interest in automation. SAE International, which connect and educate engineers while promoting automotive engineering, developed a system for classifying levels of automation from level 0 to 6. Tesla’s ‘Autopilot mode’ has been considered to be at level 2 of automation, although some consider it to be level 3. In this partial automation level, steering and speed are controlled by a driver assistance system, but the driver has control of other parts of the car and can override. Automotive brands are investing in autonomous technology so that they don't get left behind, but how will customers adopt? And how long will it take?
Can you imagine a future where:
The vast majority of people will no longer be driving themselves, and those wanting to control the car will have high insurance premiums and tracking devices fitted?
The insurance market is completely transformed, as the risk is dramatically transformed away from the driver?
There could be a mixture of institutionally owned and privately owned vehicles - earning money for their owners while not in use by them?
Some trips are totally free for individuals, as the cost could be covered by in-car advertisement?
Those in the automotive industry and others need to be ready to meet the challenges of the changes taking place. There are also opportunities for innovation in managing these experiences. There may be an opportunity to create systems which manage the locations of vehicles in order to adapt to consumer demand and a different city infrastructure adaptation to make more use of spaces currently given to cars.
Ownership - to own or subscribe?
Last month, some 72% of car buyers in the UK paid for their vehicle monthly; having bought their car on finance. Offering a car as part of a monthly payment service has become the new norm. Credit is freely available, and dealers and manufacturers embrace the method as it enables more customers to purchase a new model of car, without the initial capital outlay.
An increasing proportion of customers are paying through a subscription - the next iteration of finance model which includes all of the components of car ownership in one payment. (See our other article for an introduction to mobility).
As customers continue to subscribe to these services, providing a seamless customer experience becomes ever more important for providers. Automotive brands need to ensure that their user experiences are at least as frictionless as those that the ride hailing and subscription services offer, but with the added comfort of having ‘your own’ car.
Analysts predict that Apple will offer its own car in the next few years - combining your mobility package with your phone, laptop, ipad, data, storage - offering a complete lifestyle package in one monthly payment. So competition is only increasing.
Ride hailing and brand appeal - will consumers buy into a brand, or a quality standard?
Uber has never made a profit in 10 years of business. It would seem that the company (and its shareholders) are not interested in short-term gains. Uber wants to become the go-to brand for urban personal transportation.
Despite being the poster child for the ‘gig economy’,with its global network of drivers that have made the brand work, they’ve made it clear that humans are not in its plan for the future, sharing this recently:
Apparently though, Uber don’t plan to mass produce their own cars. According to The Drum, they will strike deals with auto manufacturers and develop kits for their models. This does make you question how users will start to consume mobility in the future. If we are all consuming mobility in an Uber-style interface, where a car of a certain size or shape arrives to transport you, how relevant will the brand of the car be? Would your preference for an Audi or a Ford still be relevant?
At the moment, the key automotive brand manufacturer’s spend seems to have a large focus on advertising. In 2017, $47.1B was spent on advertising automotive brands, and that’s before the CapEx investments in showrooms, inventory, training and the digital experience. If you begin to order your service through a third party like Uber, how important will the manufacturer brand be versus the ease of experience?
CX Innovation for the Automotive Sector
The race to discover new models and opportunities in the automotive market is definitely on. What Uber has definitely done well is to put the user in control and place them at the centre of innovation. That seems to be something that all automotive brands need to learn from. As with all industries that are undergoing a period of rapid transformation, those that innovate and place the customer at the heart of what they do will succeed. A recent report from Econsultancy highlighted that 'those organisations with a long term plan and executive support for CX, are more than twice as likely to significantly outperform their peers'. Graphite has experience working with brands like PSA, Porsche, Toyota and Volkswagen to enhance customer experiences. If you’d like to find out more about our approach to customer experience strategy or take a customer experience workshop, get in touch for a chat via the form below.