Automakers have made headway into greener business practices with the proliferation of electric vehicles. However, in 2020 and the years to come, automakers will aim to reduce waste and use fewer natural resources as the circular economy takes hold.
The way value is created in business today is very linear: We use natural resources to build a product, sell that product into market and dispose of it at the end of its life cycle, filling up landfills and using energy to continuously dig for natural resources.
We're seeing the circular economy in consumer brands such as Adidas and its Futurecraft Loop shoe. Consumers return the shoe to Adidas once they have worn them out and the shoes are repurposed for future Loops. It's inevitable that this same model will make its way to the automotive space, as governments, consumers and Wall Street will all expect to more sustainable business practices.
And, with automakers increasing their focus on delivering vehicles as a service, many will begin thinking about how to design products that can be reused, repaired, recycled and redistributed. This will impact teams within the entire organization — from r&d to sales, service, finance and more.
The year 2020 is shaping up to be one of the most pivotal the automotive industry has seen. And, it will be exciting to see how automakers adapt to these changes, and which ones are able to carve out new avenues for success. Ultimately, the journey to fully delivering products as services will take time, but when handled correctly, the benefits for both manufacturers and their customers will prove well worth the effort.