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Multi Modal Mobility. The concept made its way onto the agenda of automotive and automotive related conferences over the last decade, initially in a rather speculative tone of voice. People theorized about the increasing importance of mobility ‘in the near-future’. As time passed, some pilot cases were presented here and there. Tentative first steps towards finding the answers to important questions such as: ‘What do our customers want if they no longer want to buy a car anymore’, ‘How can we offer it to them’ and most importantly: ‘how can we do this profitably’.

Other future oriented concepts became familiar to anyone who sat through some conference keynotes in recent years. Acronyms like ACES or CASE (depending on your preference for putting the words Shared, Electric, Autonomous and Connected in a row). They still had a whiff of futurology about them. Something coming to transform your business at some undetermined point in the future. Possibly soon.

When we look at the automotive and automotive finance sectors today, it’s clear that the time for theorizing and piloting has coming to an end. Different players who are all part of the larger automotive value chain: OEMs to make the vehicle, dealer networks to sell and service the vehicle, captives to finance the vehicle, rental and leasing companies to optimize large fleets for usage by private and corporate customers; are all taking up position to enter a new market taking shape: the mobility market.

As society changes, consumer needs change. Car ownership is coming under pressure due to various factors: urban congestion, increased environmental awareness, an overall shift towards usership…. These changes are not the death knell of the automotive industry. Cars aren’t going away even if individual car ownership declines, but car utilization rates will optimize over time, with more people making use of less cars. The challenge lies in adapting your product offering.

Already today, we see new products available to customers that focus on individual choice, flexibility and user experience. The focus is moving from the vehicle to the driver and towards experiences.

In a changing market, flexibility and agility are key. The capability to detect shifting or emerging customer needs, define a business case and go to market with a new product to profitably meet customers’ demands are the ingredients for success. Car subscriptions are starting to take off. New products blend traditional financing with driver-centric connected services or vehicle sharing, both corporate and peer-to-peer.

The customer journey is moving online. From brick and mortar travel agencies, banks and retailers to digital self-serve channels, available 24/7 to book your trip, manage your finances, order goods for in-store pick-up or home delivery.

In our always-on, customer-centric, digital society, customers have high expectations about what is possible online. The customer journey starts with google and, ideally, ends with the ‘order now’ button on your website or app. Customer experience has always been an important part of the automotive industry’s mindset but providing the ultimate customer experience is no longer a matter of having the best customer facing staff but the best customer facing tools.

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Market research, product, pricing, advertisement, logistics… are all key in defining innovative new products and getting them rolled out quickly. The true enabler however is your IT system. System limitations can have a severe impact on the end-user experience.  A legacy system with a lengthy development and testing cycle can undo your organizations efforts to innovate the product offering. 

Most legacy systems in use in the market today stem from a time of system specialization. Captives rely on a retail finance system geared towards processing and onboarding high volumes of contracts and subsequently managing the collections. Rental companies need a view on vehicles’ availability, location and condition. Lease companies require a system that can capture and manage complexity in a cost-effective way: the various services included in the contract, customer specific clauses…

Meeting tomorrow’s challenges will require different, hybrid systems that can manage both contracted and managed vehicle use to support a broad spectrum of product lines: financing, leasing, renting, sharing as well as new blended products combining elements of these.

Continued success in tomorrow’s automotive world will rely on many factors but a key enabler will be the availability of a hybrid system that can bridges contracted vehicle usage (the finance/leasing perspective) with user-centric, value-added mobility and connected car services to orchestrate and aggregate a broader and more complex supply chain of multi-modal mobility services.

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