Better, Safer, Cleaner: Mobility And Detroit

Ellen Sasson

The industry that is often synonymous with smoking tailpipes and rusting factories is undergoing some radical changes. The automotive industry is experiencing the pace of innovation that we’ve come to expect from the tech sector.

Because the transport of people and goods affects us all in countless ways, these changes are reshaping the world we share – for the better. Here’s how:

1. It’s changing its focus from the vehicle to the business model

What we used to call the “automotive industry” is reinventing itself. It has become the mobility industry, and the change is much more than a rebranding exercise. While companies in this sector once focused on manufacturing vehicles, they’re now focused on creating experiences for citizens, for cities, and for societies. It’s a bigger mission. It’s not just about making great cars.

What’s driving this change? The traditional paradigms of buying and leasing are morphing into mobility-as-a-service. Historically, owning and leasing meant having a relationship of sorts with a single vehicle. With mobility, we don’t really care as much about the vehicle. What matters is how we get from Point A to Point B. In this new world, automakers still need the manufacturing and supply chain expertise that made them stalwarts of the industrial economy – but the vehicles they make are now a smaller part of a larger vision.

To keep pace with this evolution, traditional automakers are launching mobility startups within their operations. They’re forming strategic alliances with technology and communications companies to fill in any strategic gaps. And because they see the tremendous opportunity in developing the autonomous fleets that will transform the shipping and distribution industries, they’re scrambling to ensure that they’ll have a place at the table.

So, the transition will be challenging for mobility industry players, but consumers and communities will see significant benefits. As a recent McKinsey report puts it: “Radical improvements in cost-effectiveness, convenience, experience, safety, and environmental impact will, taken together, disrupt myriad business models on an almost inconceivable scale.”

2. It’s becoming more diverse and collaborative

It’s no surprise that a fundamental rethinking of the industry’s business model will call for different talents, new skills, and unorthodox perspectives — and that’s exactly what we’re seeing with the shift to mobility. You don’t need to look any further than the top of GM’s org chart and CEO Mary Barra for the evidence that the industry is becoming more diverse. And diversity is also on the rise in the ecosystem of companies involved in making mobility a reality.  Innovation is just as likely to occur in Silicon Valley as it is in Detroit, and small startups can have as big an impact as a Fortune 500 enterprise. Because of this shift, an innovative idea that used to take years to go from drawing board to assembly line now moves at Internet speed.

Mobility companies are also recognizing that their ability to collaborate within a more diverse ecosystem is a prerequisite to success. Municipalities, utilities, automakers, insurance companies, and telco providers all need one another to deliver on their shared vision, and they’re working together like never before to make the transition to renewable energy, smart cities, and a green economy. There’s now widespread acknowledgment that the future of mobility depends on the cooperation of manufacturers, regulators, governments, and technology companies. And that means the industry needs people who can listen, negotiate, and compromise.

3. It’s becoming cleaner and safer

Speaking of Mary Barra, her announcement of GM’s vision to achieve a future with zero crashes, zero emissions, and zero congestion shows how the entire industry is moving toward a cleaner and safer future. Twenty years ago, this type of announcement would have seemed impossibly audacious. Today, it seems inevitable.

While the internal combustion engine is a reality for the foreseeable future, the real innovation is occurring with electric and autonomous vehicles. The growing momentum of these technologies is leading to a world with less congestion through better traffic management. Fewer distracted drivers drowsing off or texting will reduce fatalities. We’re seeing these changes happen now. Traditional players like Magna, Borg Warner, and Delphi/Aptiv are learning to create business models in the electric/autonomous world. The change won’t happen overnight. Big, powerful, gas-burning vehicles are still money makers for the traditional industry players, and electric vehicles with lithium batteries have their own environmental impact, but the needle is moving. And it’s pointing to a greener, safer future.

Profound change can be either disruption or opportunity. For the automotive industry, the transition to mobility is turning out to be a period of reinvention and new possibilities. It’s an exciting time to be a part of an industry that’s changing the world for the better.

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Ellen Sasson

About Ellen Sasson

Ellen Sasson is an experienced automotive industry leader and thinker. She’s spent more than 20 years working with automotive suppliers, dealer groups, and automakers as they continue to refine their business models. Mobility and Cities is the new frontier and Ellen is on the front lines working with both startups and traditional businesses on behalf of SAP and SAP.IO. Her background is software and services – from Accenture to IBM to SAP to Microsoft and Salesforce and back to SAP – Ellen grew up in software and auto.