Surviving a handbrake turn
Will “Volvo for millenials” disrupt the undisruptable?
Traditional car makers might become the crash test dummies of a market remade using far more digital assumptions.
There’s nothing so stable as the car industry. Constant, predictable evolution in product, no fundamental advance in business model and – while the world’s moved through the information age into the post-digital universe - most brands have survived with their core values intact.
But are all these rugs about to be ripped from underneath global car makers?
Chinese carmaker Geely certainly hopes so. It’s new brand, Lynk and Co, “aims to do everything differently,” according to Mashable. Which, frankly, is a bit of an understatement.
In favour of the web
The company’s first model, an SUV called the 01 (subsequent releases will be named 02, 03, 04 and so on), will be sold exclusively online from next year in China and in the UK from 2018. It’ll have the same yet-to-be-revealed price around the globe and delivery direct to the customer. And it could lead to buyers “shunning traditional car dealerships in favour of the web”. An interesting prospect, which might not be as outlandish as it sounds.
Perhaps the 01’s most disruptive feature is its redefining of what it means to own a car. Dezeen calls it the “most connected vehicle in the world”, and this connectivity allows the 01 to be shared by a group of drivers rather than monopolised by an individual.
The cars are sharable from the moment of purchase and have doors that open via radio-frequency identification (RFID).
Through the accompanying digital platforms, “keys” can be shared between friends, family and even strangers for their use at specific times. Motortrend isn’t the only website to mention the 01’s potential to disrupt the car-sharing industry, currently dominated by firms such as ZipCar.
No doubt it was the 01’s myriad safety features (forward collision warning, blind spot detection, lane departure warning and autonomous emergency braking) and slightly boxy appearance that led TheVerge to dub it the “Volvo for Millennials”. Volvo is in fact a sister brand, but hasn’t yet employed a bespoke smartphone app, which means the 01’s entire user interface is customisable, including rearranging icons and functions to suit driver tastes. The all-digital instrument panel is also rearrangeable – music to the ears of tech-happy millennials.
The 01 is clearly a disruptor, but does it represent even more than that? With driverless cars in the offing from the likes Tesla and Google, does the connected, sharable 01’s arrival suggest the motor industry is about to be disrupted beyond recognition?
Wielding more influence
McKinsey’s Disruptive Trends That Will Transform The Auto Industry report predicts things are about to change dramatically – and fast: “Many more new players are likely to enter the market, especially cash-rich high-tech companies and start-ups. These new entrants from outside the industry are also wielding more influence with consumers and regulators.”
One way for firms to survive may be for historical competitors to cooperate - an unthinkable prospect a few short months ago - opening the door to mutually beneficial common standards and components. The report says: “Traditional automotive players that are under continuous pressure to reduce costs, improve fuel efficiency, reduce emissions, and become more capital-efficient will feel the squeeze, likely leading to shifting market positions in the evolving automotive and mobility industries, potentially leading to consolidation or new forms of partnerships among incumbent players.”
The road signs are there. Disruption looks set to transform the motor industry – and while the Lynk and Co 01 is one of the first to leave the grid, just who the renaissance’s winners and losers will be is anyone’s guess.
Who’s going to survive that handbrake turn?