Compounding this competitive threat is the challenge of operating in a more complex market in which we will simultaneously see four mobility models:
1. Personally owned and operated vehicles.
2. Shared driver-operated vehicles (like today's taxis and ride-hailing).
3. Personally owned autonomous vehicles.
4. Shared autonomous vehicles.
The vehicles that will be developed and the ways they will be used in these four models will likely be quite different from each other, and the dispersion of the fleet will add massive complexity for automakers and suppliers serving these markets.
Dealers and auto finance could see profound changes, too, with greater emphasis on offering fewer highly customized vehicles, a shift toward fleet management and changes in the number and size of loans and leases as personal vehicle ownership declines. In addition, shorter duty cycles could reduce the aftermarket suppliers depend upon.
For you, these changes mean confronting what it means to be an automotive company in the future. To date, most automotive companies have sought to create option value. While defending the core business, they have placed several bets that could be accelerated or wound down once there is greater clarity about the future. Inevitably, a lot of capital could be wasted.
Many CEOs are expected to optimize the existing business and experiment in new ones, while executing on both. Practically, that often means generating short-term yields while also taking risks in radical innovation and business model transformation. No mean feat. This balancing act has rarely been executed successfully in an enduring way.