The car industry is facing interesting times and the large dinosaurs are starting to realise this. Mary Barra of General Motors is now openly talking about the need for the industry giant to disrupt their own business model.
No doubt the rise of industry rebel Tesla has rattled the dinosaur cages with their very different business model:
- Year after year they have been voted the most innovative company by their automotive competitors despite their relatively small R&D budget.
- They have not outsourced their value chain as the rest of the industry
- They own their very different sales and distribution model.
- Their cars are platforms that can be upgraded with software rather than recalled.
- Their core technology is about energy storage - not cars.
- They are willing to experiment with self-drive despite the warnings from corporate lawyers.
Most car manufacturers are not ignoring Tesla anymore, although they still wonder how a small company like that could be allowed to change the entire industry.
Tesla is however just the start of the monumental battle that the car manufacturers are facing and they share the same fundamental assumptions that the mature companies base their strategy on.
Competing with Tesla might be known as the "good old days" in automotive
The new competition from Google and Apple is likely to be of a very different kind, completely alien to the industry in a number of ways. They might challenge some very basic assumption of the industry - that it is about moving people from A to B and that you want to own a car.
From owners to users?
In most of their activity, Google distinguishes between users and customers and they are likely to include this thinking in their automotive business model. You might not need to own the Google car - it might even be free to use like most of Google's products. It might be paid for by somebody else - somebody that wants to sell stuff to you.
What if it is not about moving people from A to B anymore?
This could transform the industry from transportation to media delivery and ownership of the consumers time while being transported. This is likely why Apple is so interested in getting into automotive: They want to get Siri into the car to be able to influence the user while being transported. The car could be their 4th ecosystem - their 4th starfish business model.
It looks like the car is becoming part of the battle of search - the battle of the first manipulation of the user. Google already knows that browser-based search is coming to an end and that the automated assistants will take over. Their battle is not just with Apple. Amazon prime is now the starting point for over 20% of all search and Facebook has recently introduced "M", their new assistant.
Will you "like" the facebook car?
This could mean that we eventually are going to be introduced to the Facebook Car and maybe the 2nd Amazon Car (Volvo made the first).