As I was reading this blog on the sharing economy…http://blogs.sap.com/innovation/cloud-computing/welcome-sharing-economy-rent-new-0467455… I was faced with two realities.
The first reality is that perceptions are indeed changing…what was important or even a right of passage, so to speak, owning a car, is not always so important today. And as new vehicle acquisition costs continue to rise, leading to longer finance terms, many people are priced out of the market, especially the younger generations whose purchasing power is not so mature. The concept of “renting being the new owning” makes some degree of business sense. It allows for “use” when it appropriate and avoids the cost of a vehicle sitting in a driveway. Even more sensible in dense metropolitan areas where congestion and storage costs are significant.
There are many new business models to accommodate the new trends…http://www.zipcar.com/…being one that is hugely successful in metro areas. http://www.redrideapp.com/ presents availability and cost of shared or rented transportation. These are clear indicators of a shift for some towards transportation as a service rather than a vehicle ownership proposition.
The second reality for an old car guy is much more comforting. I was pointedly reminded by a customer that despite changing transportation expectations, perspectives and even new business models there are a few facts that remain unchanged and will likely continue unchanged for quite some time.
Cars and trucks, whether they be entry level, mid-level, or luxury, small amounts of innovation or vast, have to be engineered and designed. The design and R&D efforts of car makers will continue to create new and innovative vehicles that customers want. Whether the desire is owning a vehicle or just using a vehicle when needed the market of customers will drive the design of new vehicles…nothing really changes!
These innovative designs then have to be built! The sourcing of components, albeit with networked efficiency, remains a necessary process. Assembling those components into the finished vehcile will continue. Efficiencies will emerge, new ways of manufacture will come, but in the end vehicles will continue to be assembled and shipped to distribution and sales points…nothing really changes!
And finally cars must be sold and serviced. Whether they are sold to people who continue in the ownership model or if they go to the ZipCars of the world that deliver transportation as a service…they still have to be sold, to individuals or companies. And they have to be serviced just as today. Automotive distributors and dealers will remain viable for a very long time…nothing really changes!
So as much as the world changes, it also remains very much the same! Change is good, stability is comforting!