129.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?// INTRODUCTIONThere are currently a lot of things going on that have a strong impact on theautomotive industry. With this paper, we would like to develop a vision where thiscould lead. It isn’t a scientific study but rather a responsible look at socialdevelopments, trends and cases. Fact is that we have seen other industries changecompletely – music, books, photography. And we have seen those players die thatdidn’t adapt in time. So we asked ourselves:à What do car manufacturers have to prepare forin order to live a long and healthy life?// NEW SOCIAL PARADIGMSMultiple InsightsBuying a car involves a highly complex decision-making process – selling one is anart. For starters, there is the issue of increasingly segmented target groups. Thereare no longer clearly defined, large clusters of people with similar needs anddesires who can be addressed with one general brand message, no single insightthat is true for “the majority”, not two consumer profiles that are identical. A recentuniversity graduate, an established business man with a passion for dogs and watersports, a young family and an elderly couple with an allotment garden at the otherend of town – they all have to be able to see the same car brand from theirparticular angle or be able to buy a brand tailored to their needs. And in order tobe heard (even better: met) you should know whereto go (see: New Content forNew Channels).In marketing communication the digital revolution has led to a personalizedapproach – with websites changing according to the visitor profile, advertisingadapting to the time of day, the weather and the websites visited before. FullSIX isa pioneer in transferring this digital obviousness to the traditional world ofcommunication, e.g. by producing 12 TV spots and tracking via Google searchvolumes which one is performing best. Remember:à Don’t treat people as if they were all the same,because they aren’t.
229.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?New Content for New ChannelsThen there is the never stopping growth of new communication channels that allhave to be fed with new, suitable content – suitable for the channel itself and formultiple-insight driven consumers.Expensively produced brand videos on the car manufacturers’ own websites mayno longer make for the most compelling viewing. Instead, it could be user-generated videos on a brand’s own YouTube channel that provide the mostrelevant, engaging and credible communication material. Car brands are obviouslyamongst the ones that rely most on perfectly shot films fresh from Cape Town –driving fast and straight into the emotional brain center of their target groups. Butthis is not enough any more – looking at the high number of consumer videos onYouTube and their visits and shares.à Car brands have to rethink the shiny, perfect worldthey live in to serve modern media and consumersbetter.SustainabilityTo save our planet, sustainability must make its way into the right brain sections ofcar manufacturers – who seem to be stuck somewhere between seeminglycontradictory trends and expectations (see: Multiple Insights), uncleargovernmental decisions and lost consumers. Honestly, if we weren’t talking moneyhere, all cars would have to be green now – not tomorrow, not in 5 minutes. Now!But even people haven’t made their minds up yet – something that becomesobvious when considering the contradictive trend towards ever more powerfulengines. So, how can a car brand position itself as sporty and environmentallyactive?Let’s face it: Sustainability is here to stay and to save our planet and our lives. Butinstead of it becoming the one and only important subject it has become a kind of“hygiene factor”: a box that every car manufacturer must tick. Not more – andcertainly not less. This has been proven by the FullSIX study “Green Commitment inGermany” (http://greencommitment.fullsix.com): People DO have expectationsabout brands’ commitment to the environment, and they DO check if greenmarketing statements are true (see: New Content for New Channels).
329.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?And then there are the brands that really have things to say about sustainability,but that don’t put enough effort into developing a sustainability communicationsstrategy – keeping the important arguments in the garage instead of shoutingthem out loud and clear.à Really, sustainability will be the key driver of futuretrends. (See below)// RESULTSShort Term ReactionOne self-evident reaction towards these trends amongst car manufacturers is thelaunch of a growing number of car models – tailored to the specific needs ofincreasingly segmented target groups. This way, entirely new car segments areborn – the latest example being that of the Micro SUV or (a little earlier) the hybridcar.Part of a Bigger DevelopmentWe think, however, that there is a much bigger development taking place – onethat raises bigger questions. Questions that some car manufacturers are alreadypartly addressing – that must, however, be viewed and approached as part of alarger picture of the automotive industry and of society as a whole.à Really, this is not going to be about selling cars.The following pages outline our view on the acceleration of change within theautomotive sector.
429.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?// THE BIG PICTUREThesis 1:Dealerships will be showrooms, and cars willbe sold online.eCommerce is today the fastest growing commerce and changing every singleretail area: Amazon, ebay and iTunes are revolutionists of our times – and that goesfrom generalists to specialists, from groceries to… cars! Yes, we do see many carbrands experimenting with eCommerce and some even with fCommerce(Facebook Commerce) – but let’s stay realistic: No car manufacturer is seriouslyconsidering to sell exclusively online any time soon. Still, this IS what will happen.And wouldn’t it be great for the manufacturers? No more hassle with unfaithful andungrateful dealers! Just big, branded image temples (e.g. VW Autostadt) orsponsored carsharing models (see: Thesis 2) that create unforgettable experiences– while the purchase itself takes place online (i.e. the anti-ROPO model: ResearchOffline and Purchase Online).Of course, the internet will then be the place where car brands have to fight theirway around new competition, e.g. neutral eCommerce platforms such asAutohaus24 or MeinAuto.de that sell several brands at discounts of up to 40%.That in combination with the power of user generated YouTube videos and thefact that people would rather buy a car for its iPhone connectivity than for anadditional 10hp will certainly not make life without a dealer network easier.à Cars will not be for sale where they are sold today.They will not be sold in the same way. And thecompetition will be harder to grasp.
529.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?Thesis 2:People no longer buy cars – they rent them.Owning is out – sharing is in. People start to share the big and expensive things intheir lives – apartments and cars. In Berlin you can already clearly see it on thestreets: The rate of car-owning families there is decreasing constantly.Hence the growing success of carsharing ventures: Free-floating or with fixed pick-up and drop-off stations; people’s own cars that they don’t need at certain times;or a free car in front of your door if you agree to be its “manager”, provide a legalparking space and are willing to share it with others.Everything is currently being tried out – with two consequences: 1) Everyone can find a model that suits him best – there is really no reason to own a car yourself any more. 2) The choice of a carsharing company/model already starts to become an image factor for people: Do I go with the Minis by DriveNow that count for the coolest cars and the most clever iPhone application in town? Or do I dare to drive around with a pink Citroen for MultiCity?Our question for car manufacturers:à Will car brands not sell cars to individuals any morebut rather to carsharing companies?
629.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?Thesis 3:People no longer drive – they are driven.Again, with a look to Berlin (of course, big urban spaces are at the forefront ofchange) we can see that the number of people getting their driver’s license is alsodecreasing. Why is that?A mix of walking, bicycles, rickshaws, public transportation, taxis, trains andairplanes allows people to say: “I don’t need to drive myself”. In combination withcarsharing this leads to new mobility concepts today – that might work completelywithout one person being responsible for driving in the future. But who will bedoing the driving then?Well, consider the Google car in California: Having passed its driver’s license it’sdriving around with fewer errors than any human and hasn’t had a single accidentto date.In modern cars technology is already slowly taking over: The car makes sure thatwe keep the right distance and within the lane; it breaks on its own when we gettoo close – or it parks if we’re too lazy. Assistance systems are everywhere. Soundslike another small step before we are where the Google car is today.Of course this raises the question:à How do we still allow ourselves to drive if we knowthat it would be safer to be driven?And it leads us to this vision:à New mobility brands will completely remodel thecurrent automotive industry and the concept of owningand actively driving a vehicle.
729.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?// SUMMARYThesis 1: Showrooming and eCommerce… is something that is starting right now. Every car brand will gather learnings andslowly extend its online offer – to solve dealer issues and to gain shares in thegrowing online commerce.Thesis 2: Carsharing… is taking off now in urban areas – but is still at the very beginning and highlyexperimental. But this is a good thing: Different players are slowly gatheringlearnings and will soon find out what the best mechanism is and how to optimizetheir offer. So that anyone and everyone can leave the possession model behind.Thesis 3: Mobility Brands Drive Us… is the future – but certainly one that we should prepare for.Sustainability is the one social trend that is most responsible for people to startsharing instead of owning and to get into alternative mobility concepts rather thanto drive themselves.à Sustainability will be the main reason for a quickacceleration towards the future (see: Thesis 3)FINAL QUESTION:HOW CAN THE AUTOMOTIVE INDUSTRY KEEP UP WITH THE ACCELERATION OF THISDEVELOPMENT?The answer is easy – which makes it so complicated: Car m anufacturers can’tkeep up w ith the speed of this develo pm ent if they try to stay what they aretoday.What is needed is a management that openly helps its company to create a visionfor a future that is so different from the present that you wouldn’t recognize thecompany anymore.THE ONLY WAY OUT à
829.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?//RESETThe current TrendWatch Report #16 by FullSIX Group tackles the question of“resetting” a company. In order to avoid burnouts, as seen in the music orphotography industries, brands in every sector have to come to the point wherethey ask themselves what their role is in this world and how they can continue tofulfill this role – if necessary even with a different product or service: e.g. a sharablemp3 file instead of a unique record; a digital camera, instead of a film based model,etc.And there are many examples of companies that have successfully done so: thathave managed a turnaround and saved their company from failing by questioningtheir role towards consumers and by addressing their product, marketing,distribution and entire organization. Here are three outstanding examples:What am I?NikeA couple of years ago, Nike didn’t ask Apple for a joint venture to build Nike+ in anequal, long-lasting partnership but in order to learn from Apple on how to becomea technology company.Nike todays doesn’t see itself as the shoemaker anymore that they used to be.Instead, Nike is on its way to become a major technology company that developsand offers products and services around sports that allow people to be connectedand improve their fitness.Red BullIn a recent, very rare interview with the Red Bull founder, Mr. Mateschitz said thatan energy drink was “a Zeitgeist thing” with a short lifetime. That’s the reason whyhe’s been building Red Bull Media House for a while now – creating a parallel andincreasingly important part of his business.We all have to acknowledge that Red Bull today is a media company – creatingincredible experiences, events, films and platforms that “give people wings”. Andthey are doing it better than anyone else in this specialty. Another thing Mr.Mateschitz recently said was this: “We don’t only take a suitcase full of money andbuy the mud wing of a racing car so we can put our logo on it. We have our ownracing team – we take responsibility!”
929.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?BurberryA highly astonishing example is Burberry. Astonishing because the luxury fashionindustry has so far not been famous for embracing change but rather for a strongbelief in the heritage of the brand and its head designer. Everyone but Burberry.Angela Ahrends, CEO of Burberry, has very eloquently made it very clear in variousspeeches that Burberry has understood that consumers have changed the world ofbrands and media. They are the first fashion brand when it comes to theintegration of eCommerce and brick and mortar shops or showing fashion showson Mobile first.Burberry for her is a social company. She has made that strategy very clear – andthat’s how Burberry stands out today.From Sports to Technology (Nike). From Energy Drink to Media (Red Bull). FromLuxury Fashion to Social Company (Burberry). The questions that remains to beanswered:à What will carmakers decide to be, when their worldchanges?
1029.10.2012THIS IS A FULL6BERLIN WHITE PAPER àIS THERE A FUTURE FOR TODAY’SAUTOMOTIVE INDUSTRY?// SCENARIOWe can easily imagine the following scenario:A mobility provider of the future listens to me carefully. He wants to know all aboutmy mobility requirements, wishes and movements:I have to be at work every morning at 08:30.At night, I will not leave office before 17:00 – but sometimes I don’t go backstraight home but meet some friends or visit my parents instead.At the weekend I drive to the lake in summer or to the forest in winter. Sometimes Itake my bike.Saturday night I go out. Can be late. Or really early ;-) I never really know inadvance …The mobility provider that I am using always puts the most appropriate solution formy mobility issue in front of me. Via an application that reminds me when I have toleave my home or the office. It automatically buys the cheapest possible bus ticketat the time when I am taking one, stays flexible when I’m running late. It booksrental cars, drivers and rental cars automatically. It even informs the people I’mplanning to see about when and where I will arrive. No interruptions, no traffic jams,no ticket vending machines, no possession.à Could you imagine companies like VW or BMWgoing from “Drive us!” to “We drive you!” ?More about FullSIX:www.facebook.com/F6Berlin FullSIX GmbHwww.group.fullsix.com Heinrich-Roller-Str. 16bwww.slideshare.net/fullsixberlin 10405 Berlinhallo@fullsix.de Germany