What's Next: The Next Frontier in Automotive Industry
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Between homes and offices most of us spend large amounts of time commuting but a growing awareness of transportation’s ecological impact has triggered a shift towards public and shared transport. Automobiles continue to play a significant role in society, but one that is changing. The entire automotive industry is witnessing massive disruption throughout the value chain. Digital technology in particular is proving the lever that is shifting the gears of transformation and driving ever more innovative customer experiences. In this session we will understand the major trends driving the automotive industry and how creating and being a part of a pivotal ecosystem experience, is critical for shared success.
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What's Next: The Next Frontier in Automotive Industry
- 1. What’s Next: The Next Frontier in the Automotive Industry Powered by
- 2. Welcome Dayoán Daumont Consulting Partner Ogilvy Consulting Suresh Chivukula Partner, Ogilvy Consulting Asia
- 3. Tell us where you are dialling in from! What’s the weather like in your city?
- 4. Do you want this deck? It will be available for download shortly after the webinar on: slideshare.net/socialogilvy And the recording up on facebook.com/OgilvyConsulting
- 5. THE NEXT FRONTIER IN THE AUTOMOTIVE INDUSTRY: CREATING ECOSYSTEM-DRIVEN CUSTOMER EXPERIENCES 5
- 6. AN INDUSTRY REVOLUTION IS IN THE MAKING We see key challenges emerging • Consumers are shifting from car ownership towards shared mobility models • Urban infrastructure in emerging economies and increased adoption of eco-friendly practices • Emerging digital technologies and business models disrupting the industry, driven by incumbents, start-ups and technology players Ride-sharing alone is projected to be a $ 53.8 Billion market by 2023 in Asia-Pacific. Research & Markets – Asia-Pacific Ride Hailing Market, 2017-2023 6
- 7. MODE SHARE ACROSS 10 CITIES Share of major transportation modes across 10 major APAC cities (Source: Centre for LiveableCities, Singapore, in collaboration with the Urban Land Institute, Asia Pacific) 7
- 8. NEXT WAVE OF INNOVATION The transformation based on digital technologies, triggered by the auto industry will go beyond the automobile and embed itself in the larger day-to-day experiences that an individual engages in, with frictionless movement from one aspect of the individual’s daily routine to another. It necessitates the need to have open communications with partners, competitors and customers alike, and look at new venues of collaboration in a structured manner. In this paper we have set out a framework to partner, collaborate and innovate to effectively drive transformative experiences for your customers. 8
- 9. WHAT CONSTITUTES AN ECOSYSTEM? • An environment where customers can move from one service or product to another seamlessly • Driven by a network effect, where more customers lead to more providers and vice-versa, creating a virtuous cycle • Characterized either by formal and contractual partnerships between participants or informally througha platform play where all participants are equally present • Customer sees value greater thanthe sum of the parts 9
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- 11. A FRAMEWORK TO DEFINE YOUR ECOSYSTEM The first step in building an ecosystem is to identify the over- arching Experience(s) that your target customers seek, which your brand can fulfil through complementary partners Our framework to envision an ecosystem involves • identifying partners for strategic differentiation, market outreach, foundational needs • a platform to bring them together, with your brand playing a central, curative role 11
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- 13. Forms the core of your ecosystem Resonates with the theme that your customers are aligned to. STRATEGIC DIFFERENTIATION 13
- 14. C A S E S T U D Y: “She’s Mercedes is a platform dedicated to inspiring, connecting and empowering women to unleash their best. She’s Mercedes consists of networking events, a print magazine and this digital hub, the primary aim being to create a dialogue” STRATEGIC DIFFERENTIATION 14
- 15. C A S E S T U D Y : Unlocked, only when car ownership is confirmed, Rolls Royce’s new app Whispers is tailored to the individual’s lifestyle appeal with a private travel concierge service that over indexes in customization, privacy and exclusivity. STRATEGIC DIFFERENTIATION 15
- 16. STRATEGIC DIFFERENTIATION MARKET OUTREACH FOUNDATIONAL NEEDS Brand owners need to create and leverage the power of an ecosystem to find new ways to market. Online channels, both mobile and web have played a role in the digital outreach of your brand to your customers. 16
- 17. Maserati, onTaobao, created a gaming experience that drives customers into their loyalty program, encouraging them to visit their dealerships in Shanghai and Beijing. Avatars powered by AI and facial recognition are used at the receptionist kiosk to deliver a personalised greeting. The sales team are simultaneously given a detailed profile of the potential buyer. C A S E S T U D Y : 17
- 18. STRATEGIC DIFFERENTIATION MARKET OUTREACH FOUNDATIONAL NEEDS The minimum viable car your customers expect has changed. Working with alike brands helps build a stronger proposition 18
- 19. STRATEGIC DIFFERENTIATION FOUNDATIONAL NEEDS “This brings the best of two fantastic companies. We have listened to our customers and their insights are clear, they want to carry those ecosystems into their vehicles”, Santiago Chamorro, GM’s vice president of Global Connected Services Users can take Amazon’s Echo Auto functionalities on the road, providing location-based features and connecting with compatible Echo devices at home. C A S E S T U D Y: 19
- 20. C A S E S T U D Y : GM partnered with Google to install Google Assistant and other apps, including Google Maps STRATEGIC DIFFERENTIATION FOUNDATIONAL NEEDS 20
- 21. ECOSYSTEM MACROTRENDS IN THE INDUSTRY If you can’t beat them, acquire them Leverage sensors and IoT to create new experiences The experience journey goes beyond the drive – think end-to-end Alliances will set the pace for technical protocols and data exchange 01 02 03 04 05 Data monetization will be the next driver of revenue 21
- 22. IF YOU CAN’T BEAT THEM, ACQUIRE THEM OEMs need start-ups to innovate and build on their ongoing experience transformation engagements. Start-ups need access to capital and large marketing budgets, and access to your customer base, through you Customers benefit the most through this experience-driven ecosystem. The last few years have seen automotive OEMs and suppliers proactively engage with start-ups through multiple models, including hackathons, incubators and collaboration zones, leading up to acquisitions and exclusive partnerships 01 22
- 23. ASK YOURSELF: Are there Themes that specific segments of your customers seek? Today, do you fulfill them all? Brand Acquisition / Investment / Incubation for Leverage Mobility Area Partners Year Toyota MONET Technologies Autonomous vehicles Investments from Isuzu, Suzuki, Subaru, Daihatsu, Mazda, Honda 2019 Hyundai Car Next Door Ride-sharing Steve Baxter (Shark Tank) and Caltex 2019 Hyundai Ola Electric Mobility Electric vehicles and charging infrastructure Kia Motors 2019 Daimler Flinc Ride-sharing 2017 Toyota EV Common Architecture Spirit Co. Electric Vehicles Mazda 2017 BMW Group, Daimler AG, Ford Motor Company, and Volkswagen Group with Audi and Porsche Ionity E-mobility for long distance travel Joint Venture 2017 Daimler Hailo Ride-sharing Merged with myTaxi (now called FreeNow) 2016 BMW iVentures Zendrive Road safety with data and analytics, Insuretech ACME Capital, BMW iVentures, NYCA, SignalFire 2014 ? 23
- 24. LEVERAGE SENSORS AND IOT TO CREATE NEW EXPERIENCES Sensors are being increasingly infused into the car, by both OEMs and suppliers In 2016, Jaguar Land Rover (JLR) partnered with CARFIT that combines automotive sciences, NVH and machine learning. They developed puck-shaped devices that attach to the steering wheel, brakes and wheels, analysing NVH and sending diagnosis to an app. Suppliers should identify the role data originating from their components, can play in the end-to-end customer experience. 02 24
- 25. ASK YOURSELF: Can you find ways of collaboration with your customers, internal design teams, and those of your suppliers, for the in-car experience building?? MONITOR AND PREDICT MAINTENANCE LIKE NEVER BEFORE carfit.com 25
- 26. THE EXPERIENCE JOURNEY GOES BEYOND THE DRIVE – THINK END-TO-END Affectiva, a pioneer in Emotional AI, collaborated with Porsche for its Magic Moments demo. In-car cameras detect a driver’s positive emotional state and snap a photo. The user relives it through an app and can share it across social media. Your brand holds the customer permission today, and the pivotal part of the experience journey. 03 26
- 27. ASK YOURSELF: What is the end-to-end customer journey that you want to build for your customers? Do you know the moments of truth that matter?? 27
- 28. Industry playesr have to cooperate with those they compete with, to create technical standards and protocols. This will make it easier to drive new experiences based on data, that other services can tap into, to further fuel innovation. BMW, Daimler and Audi are majority owners in HERE Open Location Platform (OLP) used for maps and location data. Its used in turn by Garmin and Facebook to provide consumer services. Suppliers like Bosch and Pioneer are also invested in HERE. 04 ALLIANCES WILL SET THE PACE FOR TECHNICAL PROTOCOLS AND DATA EXCHANGE 28
- 29. ASK YOURSELF: Are your experiences and ecosystems, Designed by Data? ? 29
- 30. DATA MONETIZATION WILL BE THE NEXT DRIVER OF REVENUE Cars will become a point of consumption of niche, personalized services, on-demand. The partnerships between suppliers and OEMs are moving to one of equals, driven partially by the democratization of data. Honda Dream Drive is a driver and passenger infotainment system. A passenger app provides mixed reality games and movies and a driver app provides the a device-less experience for restaurant reservations, movies, fuel and parking payments from the car's system. Honda enabled this with Visa and Connected Travel along with others like Atom Tickets, Chevron, Phillips 66, GrubHub. 05 30
- 31. ASK YOURSELF: What is the shared economic value that you are creating through the ecosystem play? ? https://venturebeat.com/2019/02/10/honda-dream-drive-hands-on-with-a-prototype-for-car-infotainment/ 31
- 32. ASK YOURSELF: • What is your strategy to cope with and thrive from a never-ending cycle of change? • Do you have a talent map of your existing landscape and a roadmap of where you want to get to? • Are you well placed to attract new talent, upskill current talent, and retain critical skills and staff? ? DON’T FORGET YOUR EMPLOYEES 32
- 34. According to an EcosystemSurvey, conducted by MIT CISR, Ecosystem players show a marked difference in Revenue Growth. There are seven key design dimensions of ecosystems. Four of these play a significant role in the revenue growth of their respective companies. MIT-CISR Ecosystem Survey, n=158, 15%-85% of response scale shown 34
- 35. • Start small with exclusive partnerships or commercial shared value exchanges with partners • Think of a long-term play with scalability and flexibility as supporting pillars. • Explore smaller players and start-ups 01 KNOW AND ENHANCE YOUR CUSTOMERS JOURNEY 35
- 36. Technological advances are transforming the industry which means leadership teams must focus on building a strong culture of innovation across all areas of operation. This in turn raises the issue of how best to manage existing company culture to avoid friction in what has become an ever- evolving transition 02 ESTABLISH AND NURTURE A CULTURE THAT EMBRACES CHANGE 36
- 37. A McKinsey study estimates that driven by shared mobility, connectivity services, and feature upgrades, new business models could expand automotive revenue pools by about 30 percent, adding up to $1.5 trillion by 2030. In our view, the ecosystem-driven experiences contribute to all 3 drivers of the estimated addition to the automotive market. 03 MEASURE SHARED VALUE AND ATTRIBUTE IT RIGHT McKinsey - Automotive revolution – perspective towards 2030 37
- 38. CREATE AN API EXPERIENCE LAYER Creating such a layer makes it easier for developers to build new circuits within the customer journey with relative ease, exponentially increasing the number of experiences from the ecosystem. 04 https://www.huawei.com/minisite/iot/en/vehicle-networking.html 38
- 39. A WORD OF CAUTION • Data enables experiences in the automobile and its extensions. Data privacy has to be respected and consent be gained as a part of the experience • Find the payment and commerce experience that best resonates with your target customers • Innovation comes with its share of risk. The true value of innovative ideas is when they move from the design room to the road and into the hands of your customer in rapid iterations 39
- 40. TAKE THE FIRST STEP AND BRACE UP TO REINVENT THE METAPHORICAL WHEEL AS OFTEN AS REQUIRED 40
- 41. SURESH CHIVUKULA Partner, Ogilvy Consulting suresh.chivukula.ogilvy.com +65 8690 0543 GET IN TOUCH 41
- 42. THANK YOU 42
- 43. Questions?
- 44. Thank you.