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Feature   September 15, 2017   by James Carter

THE NEW MOBILITY: Autonomous vehicles and the aftermarket

Part 6 of 7 in an exclusive series.


This is the sixth in a new series of Knowledge Centre articles on what is being dubbed as “The New Mobility” – exclusive to the AutoServiceWorld Knowledge Centre. Automotive Consultant James Carter offers a unique look at some of the latest innovations in the automotive world, how they work, how they’re evolving, and what they mean to the aftermarket.

 

By James Carter

 

Do you ever think about what your transportation might look like in the future? How do you imagine it to be on an everyday basis?

Many futurists envision a world of autonomous taxi-bots that you can call on demand to take you wherever you want to go. In fact, if you live in a town or city, you won’t ever need to own a vehicle as the taxi-bot will arrive a few minutes after you request it through your digital assistant.

Only a few years ago, idea like this were really just the stuff of an overly productive imagination. And even today they can sound completely fanciful to some. But the truth is, that new reality is falling into place.

The idea of calling a vehicle on demand has been around a long time with taxis, but it was raised to the next level more recently when Uber completely up-ended the taxi industry. It allowed you to call for a ride and pay for it through an app on your phone.

The reality is that the distance between the present situation and the coming world of a taxi-bots hinges on just one variable – the driver. Both Uber and Lyft have been working for some time to overcome this. Before his ignominious departure from Uber, the company’s CEO Travis Kalanick publically predicted that all Uber vehicles would be driverless by 2030.

The technology development in the autonomous vehicle space has been rapid. OEMs, Tier 1s, start-ups and universities have all been working feverishly, with many industry tie ups and expensive M&A activities. In fact many OEMs have publically stated that their autonomous technology will reach a Level 4 stage (that is, full autonomy with no need for a steering wheel), some time between 2020 and 2022.

Just like with both Uber’s trials in Pittsburg and Waymo’s trials in Phoenix, autonomous vehicle technology is expected to roll out as a ride-hailing service first. They are, in effect controlled “closed loop” trials to ensure safety and correct functionality. Soon after this, from around 2022 on, we can expect to be able to purchase a vehicle with full autonomous capabilities (if indeed you decide to purchase at all). Like most technology, it will be expensive at first, but with the commoditization of components, prices will fall, just as they did with other revolutionary technologies like smart phones.

It won’t be long before autonomous technology is commonplace.

The real question though is how will it affect the automotive aftermarket. There’s no doubt that the impact will be significant.

Here are four potential impacts:

1) Taxi bots mean more fleet business for repair shops

The roll out of autonomous vehicles as shared mobility is most likely to be controlled by fleets. While there are proponents of peer-to-peer (P2P) car sharing, the reality is that few people want to lend out their vehicles with such a high potential for something to go wrong, even in an autonomous world. For many people, when you control something only temporarily, there is a great temptation to mistreat – or at least give it less care than you would if you owned it. If you’ve ever had a bad experience with AirBnB, you’ll know exactly what I mean. Rental fleets have dealt with this situation for years, and are experts in this field, which means it won’t take long for autonomy to coalesce around this business model.

Thus autonomy will equal fleet business, which is a blessing and a curse for the automotive service industry. It will be a curse because most fleets demand lower costs. It will be a blessing because it creates a steady stream of business. And fleets tend to use only top-quality parts. So in a New Mobility environment, with the prospect of service expectations potentially high, liability and service issues will suggest that fleets will strive to make sure that the best quality parts and service is available.

2) No more customers at your door.

When vehicles can drive themselves to an automotive service facility, there will be very little need for ASPs to deal with retail customers. This has a twofold effect. For one thing, customer service skills may not be as highly valued. And, for another, any potential upsell opportunities will be almost non-existent. The need to educate consumers on how the vehicle works, and why it should be maintained regularly, will go the way of the dodo. You can expect the occasional visit from a taxi-bot rep… and that’s about it.

3) Autonomous vehicles rarely crash

There’s one piece of technology that created the first upswing in collisions per million miles travelled, and that’s the smart phone. After 40 years, newly distracted drivers are now crashing again, and this has created some pretty good times for those in collision. However, when most vehicles become autonomous, 93% of accidents that are caused by human error will largely be eradicated. This will have a dramatic downward effect or the collision business. Long term, new pivots will need to be studied.

4) Autonomous vehicles are full of software and high-end electronics

Think you use computers too much in your job today? Well, you ain’t seen nuthin’ yet!

Autonomous vehicles will feature extremely high-end electronics and software. In fact, the data created in just one kilometer of driving would completely fill your lap top’s hard drive. An autonomous vehicle is expected to generate 1 terabyte of data per kilometre. ASPs will need to become familiar with this technology as soon as possible, and a good place to start will be to develop a complete understanding of the new advanced driver assist system (ADAS) features, like those employed on Toyota’s Safety Sense technology. It is highly likely that ASPs will need to become very familiar with software, and it may be that specialized experts will need to be there to support technicians in their work. Ultimately a specialist technician may have more in common with a computer help desk operator than a wrench turner.

So what does this all mean for those in the automotive aftermarket?

It means that industry disruption is coming, and autonomous vehicles will be a key player in this change.

It also means that each business operator needs to have a serious think about how their business will operate in the New Mobility environment, and what the potential impact will be on revenue and profits.

My advice to business leaders is to learn as much as you can about potential future disruption. Do a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats), repeat regularly, and take note of potential pivots. In the end you may or not agree with me that on the disruption forecast to hit the automotive aftermarket, but if you’re actively looking, you’re already halfway to ensuring your business will have a long and successful future.

 

 

James Carter is principal consultant at Vision Mobility, a Toronto-based consultancy. You can reach him at jcarter@visionmobility.ca. Be sure to follow James’ insights on LinkedIn.

 


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