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Redesigning the Industry

A new auto industry is forming, triggered by a reimagining of the vehicle itself. New business models are coalescing, centered on technology innovators, fleet operators, services businesses and platform providers.

How will it all shake out?

Visionaries

Our 5-part series launches with contributions from the clairvoyant and from some very good guessers. Much of what they have to say will shock you.

Who will reign after the revolution?

Emerging technology will ultimately lead to fully self-driving vehicles. Mass-market electrified vehicles also are gaining ground rapidly. So-called connected cars and mobility services such as onboard navigation and entertainment are redefining the industry. As management consulting firm McKinsey and Co. puts it, the auto industry "is ripe for disruption."

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It saddens me to say it, but the auto industry is on an accelerating change curve. We are approaching the end of the automotive era.

Akio Toyoda has both feet in the future

For a man with his family's name on every car, Akio Toyoda ironically sees himself as a sort of Jedi knight fighting the corporate Empire. Toyoda channels that Jedi spirit to reinvent Toyota, taking on challenges buffeting the industry in a new era.


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Predictions and possibilities
Why are disruptors dangerous? They aren't protecting a business model.
By 2030, automakers will be part of tech alliances -- and won't be calling the shots
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Dealers, get ready for absorption rates that drop to as low as 25%
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Out in the country, dealerships will still look like dealerships
Service tech shortage? Not in 2030
'Hi, we're calling to see if you want to renew your subscription'
In 2025, a button at the bottom of the app screen will ask you to 'select vehicle brand.' But why bother?
In 2037, the world's last 5 automakers vie for Amazon's 125 million-car order
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A radical idea: Why not optimize vehicles for their city center or local community environment?
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The habit-forming pod
Eight months from vehicle design to the first customer delivery
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The joy of driving 'manual' out West in the 2030s
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VIDEO: Why this is the auto industry's 'Darwin age'

Han Hendriks says startup mobility players are not 'handcuffed' by a century of automotive history. Instead, new firms are looking to adopt pay-per-use business models from other industries and rapidly apply them to the auto sector. Hendriks, who serves as chief technology officer for auto interiors supplier Yanfeng, says traditional OEMs must evolve in the eyes of consumers to survive.

Strategies

In the second of our 5-part series, we look at how fast and unrelenting changes in technology have forced automakers to re-examine what they want to be and how they want to get there.

Why Geely could be a contender

The future is so unclear right now that the title of global champion could well belong to a company that was born in 1986 as a refrigerator maker and didn't produce its first car until 1997.

GM: Big ideas riding on Chevy Bolt

The electric hatchback kicked off a new journey for the 110-year-old automaker, which plans to launch at least 20 new all-electric and hydrogen fuel cell vehicles globally by 2023.

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Ford: Mobility as a human right

"It's not about who's first to market," says Bill Ford. "It's about who's most thoughtful to market.


Toyota: A giant that wants to act small

Convinced that his company's unbridled size is a liability, President Akio Toyoda wants to create a new Toyota with the mindset of the world's biggest little startup.

FCA: Skepticism, then a mad scramble

Wait and see. That was Fiat Chrysler Automobiles' approach for years to autonomous technologies and electrified vehicles. But the demands of a rapidly changing industry have forced the automaker to reassess its plans.

Honda: Era of self-reliance is over

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Today's Honda, a middling player on the global stage, concedes it finally needs outside help to meet the challenges of the future.

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Hyundai Motor Group's go-it-alone strategy banks heavily on the home market and the Genesis premium marque.

VW: Pushing hard into electrification

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Volkswagen's diesel emissions scandal forced the automaker to rethink its future more swiftly and decisively than a company of its size normally would.

PSA: Putting mobility first

Under CEO Carlos Tavares, PSA is not only making itself bigger but is taking an unconventional approach to re-establishing itself in North America after a 26-year absence.

Renault-Nissan: Scale, scale, scale

Carlos Ghosn, now ruling over a Renault-Nissan-Mitsubishi alliance, insists his expanding empire needs to grow bigger still.

Tata: Shopping for opportunities

Tata Motors has accomplished more with Jaguar Land Rover than many thought was possible when the Indian company purchased the storied British brands in 2008. But now it must do even more.

Daimler: EVs in all shapes and sizes

The new vision for Smart speaks to how much new demands of electrification and autonomy are shuffling corporate strategies, even for a longtime technology leader such as Daimler.

BMW: What comes after 'ultimate'?

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What happens to an automaker that claims to make "the ultimate driving machine" when cars can drive themselves and have electric motors that lack a satisfying roar under the hood?

The others: Balancing vision vs. reality

Smaller automakers must shape strategies that merge their vision of the future with the realities of today.

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Larry Dominique says changing shopping behaviors are the reason French automaker PSA Group's first plan of action as it re-enters the U.S. market is developing a mobility strategy that offers services without its cars. After more than three decades in the business, the GM-Chrysler-Nissan-TrueCar veteran says there are “better margins at times when focusing on some of these service-based businesses than pure manufacturing.”

Suppliers

In the third of our 5-part series, we look at how suppliers are reimagining themselves and regrouping into new partnerships to deliver the vehicles of the future.

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Jockeying for future mobility position

The bright future of autonomous vehicles and smart transportation grids is still a bundle of unanswered questions. But one thing is for sure: getting there is triggering a massive industry restructuring.

Product transformation ripples through supply base

ZF is remaking itself for a future industry of autonomous vehicles and advanced electronics. Many suppliers are also repositioning themselves to look dramatically different in the future.

VIDEO: Magna CEO Walker: Even visionaries need to turn a profit

Longtime Magna boss Don Walker can quickly curb the enthusiasm of someone who believes widespread adoption of electric vehicles and robocars is just a few years away. The head of North America's largest auto supplier says it could take a decade or longer for EVs and AVs to dominate the world's roads. And while Magna is aggressively developing new technologies, Walker warns: 'Nobody will thank you for being a visionary' without a return on investment.

Retail

In the fourth of our 5-part series, we examine how dealerships will survive upheaval of the business model by shifting their focus toward mobility services and away from selling cars.

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While there's no certainty in any future prediction, it is pretty clear that today's dealership model -- based primarily on selling one vehicle at a time to individuals and then servicing those cars and trucks -- won't emerge unscathed in a world of shared, autonomous, electrified vehicles.

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AutoNation CEO Mike Jackson says there is a revolution in the sharing marketplace on the way, but it won't have much effect on personal use of cars.

Jittery over future, some dealers decide to sell

Buy-sell advisers say the number of sellers coming to market has escalated, largely because of auto retailing's uncertain future.

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View from NADA's side: Carmakers must adapt

Dealers are positioned to adapt to the changes brought on by transportation disruptors such as electrification and autonomous rides, but are automakers?

Mobility opens new auto finance opportunities

Dealerships themselves may have the most opportunity to support auto finance as they become mobility experts.

Q&A: The brave new world of retailing will be their world

For two young dealers whose careers are likely to include massive changes in auto retailing, the future of the business is top of mind. But so are daily operations.

Wanted: Product presenters, not salespeople

As automotive retailers tweak their business models, the number and type of employees needed change dramatically.

VIDEO: Dealers must become as ‘efficient as Amazon,’ as ‘enjoyable as Apple’

Don Flow says there’s a “brutal reality” confronting his dealer peers as new developments such as ride-hailing services force the age-old auto retailing model to evolve. The CEO of the 36-franchise Flow Automotive Cos. says dealers will survive and flourish – but they must become digital companies and focus on creating a personalized experience for customers.


ADVERTORIAL: Are We There Yet? An Industry in Transition


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The Food Chain

In 2030, automakers will be joined in uneasy alliances with suppliers, mega-dealers and giant fleet owners. Which of these groups will be calling the shots?

Ride-hailing firms will be giants in 2030

In 2030, expect automakers to be trying to manage uneasy alliances of suppliers, huge ride-hailing fleets, mega-dealers and Internet giants — all with their own agendas.

Should automakers leave automaking to others?

What if a car company outsourced its entire vehicle production operations to a secondary entity that would operate like an automotive version of Foxconn, Apple's gigantic manufacturing partner?


How to make a go of it in mobility

Mobility service companies of 2030 will succeed or fail based on branding and customer experience.

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A bevy of business models and types of enterprises are expected in 2030.

VIDEO: Why 'the consumer is the CEO'

Customers and countries will be among the automotive sector's biggest power brokers as the industry races toward an era of electrified vehicles and robocars. That's why automakers and parts suppliers are developing various zero-emission technologies and personalized car interiors while keeping an eye on regulatory changes from the '800-pound gorilla' in the room.

PostScript

The industry's future reads like a science-fiction novel

Discussing the future, even with Jim Lentz of highly successful Toyota, can be a deeply disorienting task.

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