The evolving mobility ecosystem

Four future states

There’s a debate taking place over how the current industry will evolve. Will it move incrementally towards some new mobility system? Or abruptly transform into something radically different from today’s system?

Deloitte’s take is that for an extended period of time (perhaps the next 10-15 years) these visions will co-exist through four interdependent, concurrent futures for personal mobility that we call:

• Incremental change
• A world of car-sharing
• The driverless revolution
• A new age of accessible autonomy

Profound disruption could extend far beyond the automotive industry. Every aspect of the modern economy based on the assumption of human-driven, personally owned vehicles will likely be challenged.

Read the full supplement "Examining the evolving mobility ecosystem" here.

How should the automotive industry respond to these changes?

• Global automotive manufacturers (OEMs) face momentous and difficult decisions. For example: Do they need to evolve from a (relatively) fixed capital production, first-transaction, product-sale business into one centered on being an end-to-end mobility services provider?
• Automotive suppliers will likely have to adjust as OEMs transform. One potential change: as sales of autonomous-drive vehicles grow, suppliers will need lean, agile operations to serve the highly varying needs of the personally owned segment.
• Dealers may also find their role in the ecosystem challenged. For example, as autonomous-drive vehicles become more common and the number of personally owned vehicles decline, the dynamics of vehicle service and repair will likely change, greatly reducing the need for the current network of more than 16,000 dealers nationwide.

Moving forward

Sources of value will shift profoundly in the future mobility ecosystem. What are the strategic and operational implications for legacy incumbents, extended industry participants, and disrupters as they weigh their future directions?

• Industries rise and fall. Cycles take long periods to play out but eventually change occurs.
• The system benefits and fundamental economics for passengers of the disrupter vision are overwhelmingly compelling.
• There is a pathway for current automotive industry players to lead the adoption of the future ecosystem but it will require fundamental, rapid change to their current business model. The value will likely accrete to those who: 1) provide “end-to-end,” seamless mobility; 2) manage the mobility network operating system, and 3) holistically create and manage the in-vehicle experience. Everyone in today’s ecosystem should reassess how they will operate and create value during the interim period of the four states and in the future.
• The insiders and disrupters need each other. Despite their wariness and highly differing outlooks and perspectives, automotive companies and technology firms should consider forming a more symbiotic relationship since they are mutually dependent.
• The disruptive effects for the industry as a whole are profound. Whenever an industry goes through a significant transformation there are winners and losers. Everyone in today’s automotive core and extended value chain should determine “where to play” and “how to win” in the future mobility ecosystem. Offsetting the disruptive impacts are numerous areas of opportunity offering great potential. Each of these new opportunities can bring about new players with differentiated capabilities and change the fundamental dynamics of where and how value is created—and the market will likely decide who wins and loses.