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CARS ON DEMAND: Why the Internet is (slowly) killing car makers


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De l'automobile individuelle à l'infrastructure de service automobile grâce au digital. Par Fabrice de Gaudemar, membre du Directoire d’Eurazeo, est notamment en charge d'Eurazeo croissance et de …

De l'automobile individuelle à l'infrastructure de service automobile grâce au digital. Par Fabrice de Gaudemar, membre du Directoire d’Eurazeo, est notamment en charge d'Eurazeo croissance et de l'investissement dans Europcar.

L'objet automobile vit une transformation, mais c'est également le mode de consommation du transport qui est boulversé. Nous faisons face à une redéfinition des modes de distributions, d'usages, comme si l'achat et la possession d'une automobile n'était finalement qu'un accident historique ! L'impact sur les constructeurs est direct, forcés à repenser leur business model.

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  • 1. CARS ON DEMANDWhy internet is (slowly) killing car makersJune 2013 @ The Family1
  • 2. Who wants a car anyway ?▲ Less cars▲ Less kms driven▲ Less driver licences2        Between  1992  and  2007,  the  number  of  17-­‐  to  20-­‐year-­‐olds  who  held  licences  fell  from  48%  to  38%,  and  for  21-­‐to  29-­‐year-­‐olds,  the  number  fell  from  75%  to  66%.    ▲ More congestion in cities▲ More taxes▲ More tolls (urban or roads)▲ More parkings and fines price augmentationJune 2013 @ The Family
  • 3. Who wants a car anyway ?▲ Service vs Ownership general move▲ Some traditionnal services have been here for decades–  Long term leases for corporate fleets–  Rent a car▲ The Sharing Economy is coming–  Collective optimisation of existing assets–  Internet enabler–  Some technologies converging : GPS, contactless Id, 3G…▲ WORSE : the car as a status is dead !–  b€ spent in car advertising totally out of scope–  Ask your friends or kids friends !3 June 2013 @ The Family
  • 4. New mobility offers are appearing▲ Long distance carpooling–  Today, 5 million French are using carpooling*–  #1 French carpooling service (Blablacar) was launched in 2004 now has 2million registered users and recorded 150% of growth during the last 4 years–  European wide service now▲ Urban mobility v1.0 : car sharing–  Car-sharing services have spread throughout France since 1999•  Paris (1999), Strasbourg (2000), Bordeaux (2001), Marseille, Avignon (2002), Lyon (2003), Grenoble,Chambéry, Annecy, Saint-Etienne (2005), Montpelier, Nîmes, Narbonne (2006), Lille (2007), Poitiers(2008), Toulouse (2009), Besançon (2010), Angers (2011), Tours (2011), Paris (2011), Metz and Nancy(2012)–  Many trials all over Europe and USA–  Most successfull : Zipcar, bought out for 500M$ by Avis early 2013▲ Urban mobility v2.0 : cars on demand–  Autolib launched in December 2011 : already 15,000 members, with morethan 1 million trips completed–  Car2Go by Daimler/Europcar in Germany, Austria, Netherlands, US andCanada–  DriveNow by BMW/Sixt–  Peer 2 peer services started : Buzzcar, Local motion4*  source:  BIPE  June 2013 @ The Family
  • 5. June 2013 @ The Family5Cars on demand
  • 6. June 2013 @ The Family6 6§  Cars available 24/7§  Always close to you§  No stations : park anywhere !§  Everything automated for user§  Cars geolocalized in real time§  Reservation of cars online orvia Mobile App§  Check-In and -Out of Carsthrough Smartcard orSmartphone (24/7)§  Membership/Community based§  Usage corresponding to urbaninhabitants aspirations§  Accessibility is key§  Using parking spaces over-and under-ground§  No dedicated parking lots§  Choice of spots: tbd
  • 7. June 2013 @ The Family7Different mobility solutions for different usagesExample use case§  Trip down-town§  Opera visit§  Visit a friend down-town§  Shopping groceries for single-personhouseholdSolutionOne-way: Possible city-wideExample use case§  Trip to recreation area§  Visit a friend in suburbs§  Shopping trip for family§  Away game for amateur athletesSolutionOne-way: Not possibleExample use case§  Holiday trip§  Business trip for several days§  Car replacementSolutionOne-way: Possible nation-wideDuration: Half hours Duration: Hours / Days Duration: Days7
  • 8. June 2013 @ The Family8URBAN SEMI-URBAN RENT A CARBooking channels Rental kiosks, call center, online Smartphone App, onlineStation, call centre, online,smartphonePrice structureBased on hourly rate + subscriptionfeeBased on km Based on daysOne-Way-AbilityOne-way availability within citybetween stationsNo one-way ability or high price One-way nationwideDensity Very dense => 1000 cars / cityStarting with specific amount of hotspotsObjective to cover living districts in 5min radius>400 Stations nationwideMinimum renting time 0,5 hour 1 hour 1 dayCars 1 urban model onlyEconomy/Compact station wagonLow Carbon FootprintAllCars branded Yes Small branding NoRangeShort distance / Electric vehicleLimited to the center of Paris and 46communes within the Paris areaNationwide unlimited UnlimitedDifferent business models8
  • 9. June 2013 @ The Family9 9§  Implement a truly holistic “urban mobility concept”: Full continuum§  Citizens of City would enjoy-  Freedom: Wheels when they are needed-  Flexibility: Choice of vehicle brand, type and size based on use occasion-  Convenience: Vehicles on demand within walking distance§  Further improvement of City image: Reduction of the carbon footprint and marketing of a“Greener Lifestyle”§  Further benefits for the city : Reduced fuel consumption and traffic jamsAdvantages for the City?  Urban  Mobilty  Concept  A necessary continuum for a life without car ownership
  • 10. Who’s playing ?▲ Old guys are starting–  Daimler and BMW in urban concepts–  Europcar (Car2go) , Avis (Zipcar), Hertz (Hertz on Demand) , Enterprise(Wecar)–  Daimler has started a more comprehensive approach (MyTaxi…)–  Failure of Renault/Better Place model▲ New entrants…are not really here for cars !–  Bolloré : battery play !–  Tesla : still selling a car…but building its infrastructure⇒ become Chevron instead of Ford ?–  Many « sharing economy » startups with Peer2peer modelsJune 2013 @ The Family10
  • 11. What’s next ?▲ New technology–  NFC, CAN bus readers, 4G…–  Real time big data▲ Sharing economy needs volumes–  Availability–  Profitability !▲ On demand needs ability to « guarantee » availability–  Challenging for pure peer2peer models , contrary to AirBnB▲ Industrial models are expensive !–  2€ of capital for 1€ of revenue when owning assets–  ROCE low▲ Need to integrate all public transport solutionJune 2013 @ The Family11
  • 12. What’s next ?▲ LET’S MIX TO BE USER CENTRIC–  Real time availability–  Networked cars (and self-driving ?)–  All services encapsulation (cf ridescout in Austin, TX or Toowup inMontbeliard)–  Who cares who owns the car ?!▲ BUT…▲ Who will lead ?–  Listening to users–  Inventive–  Fast to adapt–  RichJune 2013 @ The Family12
  • 13. THANK YOU !June 2013 @ The Family13
  • 14. June 2013 @ The Family14▲ Eurazeo Croissance supports high growth potential companies witha proven business model in their ambition to achieve thetransformations they need to become established global players–  International expansion, industrial/commercial investments, external growth,etc.▲ Focus on growth stories based on product or market disruptions, witha strong operational leverage▲ Investment across selected industry categories driven by favorabletrends–  E.g. renewable energy, green chemistry, data sharing, e-commerce, etc.▲ Acting as a reference shareholder in partnership with management14
  • 15. June 2013 @ The Family15Eurazeo at a glance15A LONG TERM INVESTOR▲ Strong family and institutional structure▲ Listed on Euronext Paris▲ €4bn assets under management▲ A pluridisciplinary team of investmentprofessionals▲ Deep network and strong track record▲ Investment philosophy: accelerating andenhancing the transformation potential ofcompanies▲ Active support to portfolio companies▲ Flexible investment horizon3 OTHER INVESTMENT STRATEGIES ALONGSIDEEURAZEO CROISSANCE  for mid to large buyoutfor SMEs buyoutfor real estate