According to Marc Winterhoff, Director and Head of Arthur D. Little’s German Automotive & Manufacturing practice, “We think this scenario is based on a false assumption, because the financial crisis is an amplifier, but not the cause, of the massive sales slump. The fundamental change in customer demand has its origins in the steadily rising oil prices right up to the outbreak of the crisis and in the debate over CO2. These are both sufficiently well-known and globally acting megatrends which, until that point were given only scant attention by the automotive industry.” These factors have now irreversibly changed customer behaviour in “the blink of an eye, in terms of automotive history”. This has led to significant overall market weakness and significant segment shifts from large, luxury vehicles to smaller, fuel-efficient vehicles. Even the current historically low oil prices have not brought relief.
The questions that arise are:

• What are the long-term trends influencing the market, in addition to economic fluctuations?
• How will these quantitatively and qualitatively affect the future automotive market?
• In this context, is there still any growth potential left in the passenger vehicle market, or must the entire industry now adjust to market stagnation or even sustained sales decreases?

Against this background, Arthur D. Little, in cooperation with the Zukunftsinstitut, has produced the global study “Future of Mobility in 2020”. The study investigates long-term trends in the automotive industry and derives the resulting mobility types with different profiles. The study also provides possible strategies for market participants.
Megatrends as framework conditions for the mobility of tomorrow
The study identified three megatrends as particularly relevant for the subject of mobility:

1. Neo-Ecology, initially created by the environmental movements of the 1980s, is now perceived as a societal responsibility (“Corporate Social Responsibility”). The large increases in oil prices in the run-up to the financial crisis and the CO2 debate have again provided enormous impetus to this megatrend. For virtually all industries, products that have missed this development are scarcely marketable.
2. The megatrend Individualization describes the liberation of consumers from mass movements. Increasingly, traditional models of life are being abandoned and in all strata of society customers enjoy being non-conformist. For example, a successful businessman may do without status symbols and drive a small car; while on the other hand, a student may drive a middle-class family sedan.
3. The third influence, the Mobility factor, describes the strong quantitative growth in mobility. In the 1960s and 1970s, the individual mobility radius expanded significantly in the triad markets, while the BRIC markets (Brazil, Russia, India, China) followed with a slight delay. However, limitations or adverse effects of mobility, such as traffic and CO2 emissions, were only reflected in society at a much later date.

“Based on these megatrends, corporate trends and consumer trends,” explained Winterhoff, “new types of consumers for mobility, so-called mobility types will have formed by 2020.” Winterhoff identified the mobility types of Greenovator, Family Cruiser, Silver Driver, High-Frequency Commuter, Global Jet Setter, Sensation Seeker and Low-End User for the triad markets. For the BRIC markets, there are also the Basic, Smart Basic and Premium mobility types, which means two additional low-end and one additional high-end mobility type.
From the automobile to the mobility market: The business model of the future
The analysis of the mobility types shows that the requirement profiles of customers are shifting: sustainability, individuality, and optimum cost position are the focus of most customer segments, while luxury, power, etc., are important evaluation criteria only for a smaller customer segment. In vehicle development, automobile manufacturers face the specific challenge of properly balancing their capacity to innovate. Enormously expensive development efforts towards sustainable vehicle concepts must be made, while at the same time customers will expect manufacturers to provide a product portfolio that is appropriate for shrinking consumer budgets in terms of acquisition and operation costs. “The ambivalence from increasing development and production costs and declining or stagnant market volume,” says Winterhoff, “puts at risk the profitability of existing product-focused business models, especially in such a fiercely competitive market.”
The study “Future of Mobility in 2020” shows that there is an acute need for action. Customers intend to invest less money in mobility and are less willing to be bound to a product for too long. Nevertheless, demands for mobility, sustainability and innovation are increasing. In this environment, only a few market participants will be able to achieve the necessary margins from primary product-related revenue streams. Today's automotive market is increasingly becoming a mobility market. Through the intelligent transformation to new business models, the OEMs can take advantage of opportunities and ward off threats from new market participants - other industries, such as the computer hardware industry and most recently the mobile handset industry have demonstrated successful possibilities in this regard. For some OEMs, however, this means rapid and consistent action in order to secure future competitiveness. It will not be an easy path to follow. In addition to determining the optimum business model in each case, the main challenges faced by automobile manufacturers are the reorientation of the product and service portfolio, focus on the value chain and the establishment of cooperative networks.
“The Future of Mobility 2020” is now available for download at www.adlittle.com/mobility-2020