2016 Geneva International Motor Show – Part 1: Industry trends

Introduction – On neutral ground

So, the 2016 Geneva International Motor Show at the Palexpo exhibition center closes it’s doors at the end of this weekend. Although I consider myself as a regular visitor of the show, I got a bit bored in recent years: Lots of people, lots of noise, it’s always hot and there were not that many interesting cars, which of course is a purely subjective point of view. 😉 Anyway, I won tickets at a DS Automobiles Facebook game (thanks DS!) and decided to give Geneva one more chance!

So how can I describe this 86th edition of the Geneva International Motor Show? First of all, electric cars are getting mainstream and cool. A couple of years ago, if you looked at the electric cars available, they were still small, not very sophisticated and with the exception of Tesla Motors, none of the established car brands had one that would just come of the production line right away. Now that we are in the second half of the 2010’s, the revolution of the automobile industry has finally kicked in and we are witnessing a fast-paced change of technologies and behaviors. Porsche already presented their E-Mission in Francfort last year, Peugeot just green lighted the 500 hp 308 R Hybrid, even Morgan made an electric version of their iconic Threewheeler! Everyone is living the unleaded liquid in the dust and fills up with some electrons!

1) Paradigm shift in the car industry

I’m not sure I should mention this at the beginning of the article, but this motor show showed that Tesla is spot on with their cars and philosophy: electric cars that look and drive just like any other ‘conventional’ cars, but are in sync with the generation Y‘s lifestyle. With every element of our life becoming more and more connected (smartphone, cloths, housing), the car is just one element of the equation that has to follow the trend if it wants to survive in the jungle. Why is Tesla doing it right? Not only are they at the forefront of electric drivetrains, but all of the functions of the car are piloted using their big and very intuitive touch screen, that is getting updated regularly. The days where you bought a car and had to physically go to a dealer to get it updated and pay a lot of money for it are counted. Minor bug fixing or even recalls are sent from Tesla to their cars and it updates itself.

The established car companies will have to make a paradigm shift. Yes, the automotive OEM will get more information on their cars in real time, but to some extent the dealers will be taken out of the equation. In essence, a car will soon be completely working like smartphones already do today: Their is an update for a certain application / function of the car, you get a notification and update it – wireless and for free. And with the software evolving rapidly, customers want those updates to be on the car as well and have the different interfaces communicate with each other. So the car you buy today will still be appealing as a used car in six years time.

Tesla started it, but all the other ones will have to follow that (r)evolution. Many car companies are setting up offices in Silicon Valley for that reason. It’s not the only reason and of course, because they are all developing autonomous drive modes. But again, that is all linked with each other. Gilles Vidal, designer of Peugeot made a clear statement on this toping during an interview with Renaud Roubaudi of POA. Basically, he says that “the automobile is one brick of a world in which everything will be connected and evolve in the same time. What people want in their daily life, be it their house, their objects or their car, is that the renewal of those things will have to be fast. And since everything will have to be connected, the auto industry, which is currently one of the slowest industry in the world in terms of developing a new car, will have to become hyper adaptable, software but also hardware-wise.” Check out the interview. His statement starts at around 15:00 min.

2) A Motor Show is no longer a must

2016 MINI brochureThere is another paradigm shift I noticed on this years’ Geneva show: MINI was nowhere to be seen. Usually, being a brand of the BMW Group, MINI always shared it’s stand with BMW. This year, BMW had the entire space just for themselves, and it did look like there was something missing. Went I asked them where MINI was, they confirmed me that they decided not to come anymore, that it was part of their strategy. Sadly, all they could give me was a small brochure of the MINI model range. 😀

BMW stand, 2016 Geneva International Auto ShowSo what’s my point? The media already reported in late 2015 that MINI would skip the North American International Auto Show (NAIAS) in Detroit as well as the show in Geneva. Jaguar Land Rover would also not be a part of the NAIAS in 2016. The fact is that customer behavior have changed and car companies, no matter how premium they are, have to spend their money wisely. Auto shows cost a lot and don’t necessarily generate much money in return. Many years ago, people used to buy their new car on the auto show. Today, dealerships are getting bigger and better equiped in demo cars. So basically you’re better of checking out the car you’re intersted in there and get a test drive in the same go, which you can’t at the auto show. Moreover, with customer relationship management and big data getting more and more important, car companies start creating regional and smaller events that reach the target audience more effectively than just a car show for everybody. People want the companies to come to them and not the other way round. If you want to sell me your product, you come to me, I don’t want to take the hassle to go to you.

What does this mean for the future? As some brands have started, others are likely to follow that trend and pick just a few auto show. Like any other industry, the automotive industry constantly has to ask itself if their investments are still effective and if so, how they can increase their efficiency. After all, the customer is always right.

 


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s