BMW will be hoping its i3 gets an electric reception. Source: Supplied
Two conferences earlier this month illustrated a profound shift in the economies of the western world that will changing the design of our communities and the way we do business.
Probably the biggest event on the technology world’s calendar is Las Vegas’ International Consumer Electronics Show, a week later the automobile industry has its annual showcase event at the Detroit Auto Show.
In the last few years the focus of car manufacturers has shifted from Detroit to the Las Vegas show as CES has become the place to launch automobile concepts and products.
Two reasons have driven this shift; the dramatic increase in the automobile technology in the last two decades is seeing motor cars having more in common with computers and consumers are moving away from owning cars and driving everywhere.
In Australia that shift was illustrated earlier this week with the release of bureau of statistics figures showing car sales have been, at best, stagnant for the last year, this echoes other studies finding journeys by motor vehicle have fallen steadily for the last decade. Like the rest of the western world, Australians are using cars less as work patterns and lifestyles change.
Automakers are responding to these changes by integrating more with the technology that interests today’s buyers which is why we are seeing the focus on smart, connected cars.
Probably the leading example of the integrated car is the BMW i3 electric car that synchs with smartphones, wearables and in the not too distant future the smarthome. The German automaker has identified the future motor vehicle is going to be just one of dozens of connected appliances that consumers are going to take for granted in coming years.
Another German manufacturer, Audi, illustrated a good example of how that integration will work. In a concept video released last year the company showed how a self parking car may work; a businesswoman arrives at a parking station, sets her app and walks off to a meeting leaving the car to drive itself to a space. At the end of her meeting she uses her smartphone to tell summons the car back to the pick up point.
Changing the property market
That concept itself has many implications for councils and property developers – at the very least you can squeeze more parking spaces into a building if people don’t have to open doors to get into their vehicles and precision guidance systems mean less margin for error needs to be built into parking stations – this gives the opportunity to rethink garages.
Another consequence for businesses and governments is that much of the new technology improves the utilisation of motor vehicles with services like Uber, GoCatch and Ingogo making taxis, rental and hire more accessible and efficient. Last Sunday at the LD Conference in Munich, Uber CEO Travis Kalanick claimed his service could take up to four hundred thousand cars off Europe’s roads if it was allowed to operate freely.
Those ride share and taxi apps appeal to Gen Ys and Millenials who don’t see car ownership as an essential part of life in the way their boomer grandparents did while increasingly the older generations are finding the cost of an expensive depreciating asset that sits unused for twenty hours a day doesn’t make sense when readily available alternatives are available.
Driving the battle against Google
For auto manufacturers and the associated industries all of these factors spell trouble, which is why they are keen to show shareholders and loyal customers that they are on the cutting edge of innovation and that the future lies with them and not Google.
In responding to Google’s driverless cars, companies like Volkswagen and Mercedes are keen to show off their autonomous vehicles with the latter showing off their concept project which reinvents what an automobile will look like when there’s no need for driver.
One suspects though that those driverless cars will prove more of an opportunity for ruthless capitalists like Uber’s Kalanick to drive costs down while increasing safety and efficiency. The autonomous vehicle could prove to be further bad news for manufacturers with business models based around suburban families owning two or more cars.
Defining the twenty-first Century
As the motor car was the defining technology of the Twentieth Century, its reinvention as a smart consumer advice will change more than the automobile industry; everything from property development through to retail and logistics are affected by the radically different consumption patterns of a connected society.
Governments too have to face radical changes with grandiose road project risking being spectacular white elephants unless they are carefully designed to accommodate changed vehicle usage. Urban planning around Twentieth Century car use also risks repeating the same mistakes of 1960s housing estates while falling registration fees and fuel tax receipts threatens to reduced government revenues.