The AUTOmobile becomes the autoMOBILE: How does the mobility revolution impact automotive business models?

The vehicle of the digital future will be created by either the automotive industry or by others who currently have better access to digital natives and hyper-connected generations. This new automotive paradigm is already here — but who will shape it?

The future of mobility trends resulting from digitization, connectedness, personalization and data insights are fundamentally transforming the automotive industry in the coming years. Large, traditional vehicle manufacturers in particular will have to adapt, develop updated business models and implement flexibility with new critical business competencies.

These new competencies are going beyond of the scope of traditional heavyweight automotive domains such as research and development, procurement or production, which all emphasize the AUTOmobile. However, the value chain of the autoMOBILE underscores the mobility revolution that is reshaping the vehicle of the digital future. Instead of traditional proficiencies that engineer only a new feature to connect the vehicle with the Internet, new abilities are becoming crucial to build, buy and partner inside new network ecosystems within a broader mobility framework. This means the digitization of the industry requires a shift in core business competencies from before to after the standard product sales model.

Every company is unique, but there are many common core business competencies in the automotive industry that can be structured in a reference model for today’s AUTOmobile industry. The book “The Mobility Revolution in the Automotive Industry: How not to miss the digital turnpike” (German edition, Japanese edition) offers a reference model based on 89 business competencies that describe the business architecture of the modern automotive industry. Based on this, along with the focus on building up digital- and mobility-related competencies in the context of an integrated mobility strategy, the book concentrates on the 15 percent of vital business competencies, and then transforms them into a reference model comprising 90 business competencies for a potential future mobility industry.

Executing such a digital transformation with all its impacts on structural optimization requires a balancing act comprising both an existing business based on product insights and new businesses based on consumer data insights. Although individual consumers expect companies that compile their data to avoid using it in ways that make them uncomfortable, consumers still want the most personalized experience possible. Companies must carefully decipher customer data insights to provide the expected experience. For example, Google is focusing on consumer data insights while traditional carmakers are locked into product insights. A primary goal in reshaping automotive business competencies is to acquire detailed consumer insight while still respecting consumer privacy, which will require a smart mix of consumer data insight and product insights.

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