I follow the social profiles of Gian Luca Pellegrini, Editor-in-Chief of the most prestigious Italian motoring magazine, Quattroruote; yesterday to launch the leading article on the June issue he wrote a post which starts like this:
There is in Italy and “anti-car” party which traverses the whole Parliament from left to right, as a matter of principle opposing any measure supporting the automotive segment. For the umpteenth time, its existence was confirmed today: the government of Prime Minister Conte in its “Relaunch” bill includes but a mere tip (albeit slightly rounded up at the 11th hour after protests) to this sector dealing with the worst crisis after WWII, confirming being hostage to a cultural prejudice.
Does an anti-car party truly exist?
Even forgetting my strong prejudice towards any form of conspiracy theory, the idea of an anti-car party feels truly outlandish.
True, the Italian Parliament opened its doors to people representing the most grotesque anti-scientific ideas ever conceived by human mind such as no-vax, flat-earthers, chemtrails and the reptilian invasion, but instead of finger-pointing unlikely associations spanning the full spectrum of political opinions, I would rather give some thought to the possibility that, after over a century, the love story between the car industry and its consumers might be fraying at the edges.
In 2011, my professional career sees me heading a team of digital consultants working for ACEA, the automobile manufacturers’ European association; our remit consists in understanding, through the use of the Internet, if and how younger European consumers relate to the concept of “automobile”.
The answer was unambiguous: while for previous generations a car was the object of desire strongly associated to concepts such as freedom and independence, a symbol for one’s own ego, for those born in the final decade of the last millennium and later, such a place had been taken by the smartphone.
For the car this meant a relationship not based on love anymore, but rather on convenience, opening up to all sorts of betrayals, provided they offered even a small convenience advantage.
Mind you, the car industry has done little to preserve a relationship based on love: Henry Ford is credited with the quote “they can have any color as long as it’s black” but raise your hand if you never felt cheated by a price increase between order and delivery or was mistreated by a hasty or ignorant dealer.
Dieselgate then dealt the final blow to an already shaky credibility, officially certifying that the car industry for many years knowingly lied to consumers and authorities.
The technological transition
In other words, this epidemic precipitated a crisis that was already brewing, ignited by a technological transition whose true nature is however still misunderstood.
As soon as I wrote the words “technological transition” I am sure the reader’s mind construed it as “the electric car”, the topic of many a heated discussion in the automotive industry since a few years. True, electrification is the subject of the deepest industrial transformation since the steam engine which instigated the Industrial Revolution, and will disrupt the whole value chain wiping away a third of it:
because excluding the glider and the wheels (for now) all the other components of the electric car are radically different from their equivalent in the fossil fuel car.
However, despite its depth and breadth, this is merely a manufacturing component: an even bigger transformation looms larger.
The (true) techonological transition
My point is that the automotive industry must not fear the austere youngster on the left as much as it must fear the jolly grandpa on the right.
The bearded chap I have chosen to represent electrification goes by the name of Galileo Ferraris: Italians may feel a little nationalistic pride in remembering that the publication in 1888 of his essay on alternate current tri-phase motors precedes by two months the now famous patent n° 252.132 filed by Nikola Tesla in the United States..
Also the smiling gentleman on the right is Italian: his name is Federico Faggin and he’s considered the father of the microprocessor and therefore I have chosen him to represent digitization.
In fact, the Kraken emerging from the ocean of electrification is the Digital Car, not limited to relatively reassuring features such as autonomous driving or connectivity: the radically digital car has a full-fledged software stack including firmware, operating system and applications.
In a digital car, new hardware features are interspersed with new software features: a new Battery Management System version could give you a little additional range; a racing launcher or suspension setup could now become software modules a client could purchase (or rent) for a weekend on the track to impress friends, only to revert to normal operations on Monday; obsolete navigation maps could become a thing of the past like rotary phones and journalists would discuss on magazines the pros and cons of a new version of the User Interface included in the new OS release.
In a digital car, security is as much physical as it is software: can you imagine the consequence of terrorists gaining control of a hundred digital cars to be used as weapons?
In a digital car, the selling process moves from a single big-ticket episode once every five or six years to a discrete process including lesser much more frequent episodes as new features become available or even a subscription-based process where clients sign up to get all the latest versions.
On the Origin of Species
The last character I chose as a symbol is Charles Darwin, because I think he would have appreciated the importance of the question marks we have ahead of us.
Will car manufacturer be able to learn to code (something they NEVER had to do before) ? Will they be able to attract, retain and motivate the right talent ? Or won’t they instead fall for the easier route chosen by PC and smartphones manufacturers before them, and lean on some de facto standard written by a company specialised in Operating Systems only to realize – obviously a tad too late – that profits tend to follow the OS ?
There is more, however. Will the dealer network adapt to such a different selling process ? Will they learn to manage clients in a continuous fashion, learning to know them well enough to proactively sell new features ? Will they learn the art of Customer Relationship Management integrating the contact channels typical of who sells a little and often, next to those typical of who sells a lot and seldom ?
There is even more, however. The value proposition to the consumer then becomes that of a truly personalized car; and as it happens with PCs or smartphones, the applications written by the OEM are but a tiny fraction of what’s available from an ecosystem of developers who must be recruited, informed, motivated and supported, something only a handful of companies (always the same) have demonstrated to master.
And there is yet even more: now the car has morphed into a full-fledged hardware platform making it an ideal host for many of the applications we today run on our phones simply for lack of a better alternative and therefore – as it happened with every digitized platform – another media with the clear distinction of mobility.
Instead of looking for conspiracies, car manufacturer should better prepare for this future, because up there Charles is looking.
And he seems rather baffled…