3 Things Digital Natives need to know
Car Sharing is a major mobility trend that is unfolding across the globe. Often in most markets, it’s people from outside the industry with a strong grasp of technology that is pioneering this new business model. There are many facets to car sharing; free floating, A to B, Station Based, Ride Sharing and now even corporates are beginning to ditch pool vehicle fleet for Car Sharing. There’s also the Peer to Peer model championed by the likes of Car Next Door.
The scenario in Malaysia is no different, there are several examples of digital natives leading innovative Car Sharing platforms like GoCar, Kwikcar, Moovby and off course Socar. If the ride hailing industry is a yardstick of measurement, the number of players are certain to increase to a point of saturation. Traditional rental companies like Hertz and Enterprise are already trialling vehicle subscription models and their edeavours will intensify in due course.
There are three things that every car sharing business should be mindful of:
#1: There’s an “Old School” Problem that refuses to go away
Regardless of how we access car ownership and mobility, there is still one very old school problem that just doesn’t go away even in car sharing models. That is, the onerous task of managing all the vehicles. A challenge, that even traditional large fleet owners have been grappling with for many years. Traditional large fleet owners have had to endure the following as a result of a very demanding vehicle management environment.
While car sharing will pioneer new opportunities and mobility trends. Digital natives will not be exempted from the above challenges and will need to tackle them in order to improve their ability to manage fleet and scale quickly.
#2: Barriers to entry are low and traditional players will want a piece of the pie
As easy as it was for digital natives to enter the car sharing segment, there will be increased competition. The biggest threat will come from the established car rental businesses and OEM’s that are seeking to penetrate this segment and here’s why these traditional players will be a huge threat:
While, the rental companies may appear to be coming a bit later to the car sharing party. They do have some significant learnings that can collapse time and monetise quicker. Also, sometimes it’s better to be second and not first in new mobility trends. As that gives one the opportunity to sit back and soak in what the competition is doing and how industry and government is responding. But be rest assured the traditional players are coming, Just ask Sime Darby Malaysia about their aspirations within the ride hailing sector.
#3 Continue to lead and set the phase for OEM’s to follow
OEM’s are at the crossroads of figuring out the impact of Mobility as a Service (MaaS) amidst the changing landscape of digital, electrification and autonomous. Industry has followed car sharing companies closely for two reasons. One, the car sharing companies are an emerging segment for fleet sales. Secondly, car sharing companies can help OEM’s collapse time and get to the car sharing market segment quicker.
Therefore, in order to stay ahead of the market and remain competitive in the MaaS ecosystem. Digital natives should aim to shape car sharing in the following ways and prepare their customers for what lies ahead:
Ultimately, the biggest asset car sharing companies have over the OEM’s is that human relationship with a “tribe” of people that believe in shared mobility. Regardless of whether these people are driven by the increasing cost of urbanisation or are just seeking to build a sustainable green future? Digital natives have got to them first and it’s not easy to replicate. This relationship is a core competency certainly worth preserving and fighting for.
In closing – It’s ultimately about Fleet Management
In summary, what digital natives have achieved is highly commendable but the sleeping giants have woken up. They are modernising their systems and refreshing their outlook on mobility. The edge digital natives have is not only first mover advantage but that irreplaceable bond of trust in the MaaS ecosystem. To stay ahead, they need to nurture this relationship and go one better than their predecessors by comprehensively solving fleet challenges. At the end of the day, car sharing is more to do with fleet management than it is to do with software.
The Show Must Go On
Despite this, Dealers need to find ways to maintain sales and grow their fixed operations business. Customer satisfaction and getting vehicles back in to the dealer ecosystem is critical in attaining these goals.
The Opportunity - Fleet Sales and Connectivity
Vehicles manufactured will soon be embedded with connectivity. Till then, dealerships can benefit by providing aftermarket connectivity. Especially for fleet customers, as they often fit vehicles with aftermarket telematics solutions upon taking possession of vehicles.
A connected vehicle will help dealerships improve customer satisfaction and retention. All planned and unplanned maintenance can be completed in a timely manner. At the same time, enabling customers to reduce fleet TCO.
Customers also have mixed fleets which can be included in to a dealership’s service ecosystem. it’s a great opportunity to convert these mixed fleets in to the OEM brand represented by the dealership. It gives dealerships more control over what types of used vehicles to bring in to their used vehicle business
Summary - MaaS is Coming, you are in the Box Seat
Shared mobility and Mobility as a service, are all coming. and will further disrupt dealerships. For now, start the journey to future proof your business. While generating new streams of revenue. After all, fleet customers are willing to pay for connectivity and dealerships are in an enviable position as they have solid relationships with customers already. Most have been servicing a customer for umpteen years - and this is a core competency that even the OEM's would envy.
Innovative disruption or just disrupting the after market Telematics sector?
Lately many local OEM’s are offering telematics services. Some are going to market by establishing strategic partnerships with established Telematics Service Providers (TSP). However, often the data that is derived from these systems are no different from what the TSP’s have been doing independently for almost 20 years.
The telematics market is already saturated with many competitors. OEM’s that white label an established after market telematics solution is only adding to an already congested market segment. Worse still, they might get pulled in to a fierce price war that is already happening within the segment.
So what’s the way forward for OEM’s and Automotive Distributors?
In summary, it’s great to see OEM’s and automotive stakeholders recognise the importance of digital but offering a telematics solution is nothing revolutionary. The sector is over serviced and Telcos have also jumped on the bandwagon in a market that is very price sensitive.
OEM’s and automotive stakeholders should leverage on digital but remain above “chaos” that currently exists in the telematics sector. Get in touch with us, if you want to know more