Mobility 2030 | The acceleration of the automotive revolution and the 5 layers of the emerging mobility landscape
Dr. Evangelo Damigos; PhD | Head of Digital Futures Research Desk
- Electric Vehicles
- Connected Intelligence
- Sustainable Growth and Tech Trends
Publication | Update:
As autonomous driving, shared mobility, connectivity, and electrification disrupt the industry, there is uncertainty about who will come out on top: traditional players or new entrants, the hardware or the software developers, product or service companies.
According to the Mckinsey Mobility 2030 perspective, success in the emerging personal-mobility landscape will depend less on what individual players are doing today and more on the choices they make regarding tomorrow’s strategic direction.
As the pace of technological change in the industry accelerates, the question is no longer whether the disruption will occur. Rather, it’s how quickly and to what extent players will have to reimagine their businesses to serve the mobility consumer of the future. The new landscape will require new technologies, competencies, and partners, while still relying on traditional businesses and products as part of the solution.
Their perspective on the acceleration of the automotive revolution, introduced the concept of a new personal-mobility landscape in which players move beyond rigid roles and, instead, may employ more than one business model, engage multiple technologies, and be active across mobility layers as their capacity to deliver value to their customers allows.
The increasing momentum of all disruptive trends, the shifts in value pools and corresponding capabilities, and the growing need for more granular perspectives on consumers requires we rethink our view of the automotive industry. The new personal-mobility landscape that is emerging is much broader than the traditional automotive industry; it is extending to include, among many others, tech players and new entrants from other industries such as software and utilities. Whether incumbents or challengers, all players will find themselves part of an increasingly diverse playing field.
In this emerging landscape, players should not define themselves as belonging to one layer, quadrant, or technology type. Instead, they may be active in different business models, engage multiple technologies, and play more than one role across layers, depending on what their capacity to deliver value to their customers allows. A classic OEM, for example, could grow from its traditional core of building vehicles for ownership toward developing provider capabilities. Furthermore, it could participate in new mobility services for end consumers in order to capture value that is generated in new areas of the landscape and that increasingly gravitates toward its center.
Those closest to the center may tend to be more focused on how they serve the mobility end consumer. Their business models are likely to be more targeted than those of players operating mainly on the outer layers of the landscape. Actors in the supplier or infrastructure space, on the other hand, have a broader audience and likely cater to both other industry players and the end customer, regardless of whether they are active in the mobility-as-a-service space or in traditional vehicle sales. A tire manufacturer may sell the same product to manufacturers, car owners, and mobility fleet operators, for example.
On the other hand, these outer-layer roles may tend to be more focused on specific technologies or solutions in order to deliver the best offer to their broader market. Roles close to the end consumer, however, will probably have to provide a combination of technologies. Fleet operators, for instance, may choose to offer a range of premium products and services (including the newest electric and autonomous technologies).
Themes relating to how industry players might actually accomplish this.
Successfully growing or transitioning into the new mobility industry will require more than simply defining or reorienting a fixed strategy. Mobility players should take four actions: define their strategic posture and select differentiating capabilities to build, choose their individual strategic setup, pursue optimal partnerships, and actively manage the transition from traditional to disruptive models.
In doing so, identifying relevant technology and business-model competencies that will allow for differentiation is an important step and should be taken early on. On the technology side, mastering software capabilities or creating advanced skills in electrification may become key areas for successful differentiation. Similarly, in considering where to focus concerning business-model competencies, it could be critical to choose competencies using a customer-centric perspective.
To build up the new mobility landscape, all segments in all layers will have to be fully served. Individual players will have an ever-growing number of ways to compile their offers and define their mobility strategy in line with their aspirations.
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Objectives and Study Scope
This study has assimilated knowledge and insight from business and subject-matter experts, and from a broad spectrum of market initiatives. Building on this research, the objectives of this market research report is to provide actionable intelligence on opportunities alongside the market size of various segments, as well as fact-based information on key factors influencing the market- growth drivers, industry-specific challenges and other critical issues in terms of detailed analysis and impact.
The report in its entirety provides a comprehensive overview of the current global condition, as well as notable opportunities and challenges.
The analysis reflects market size, latest trends, growth drivers, threats, opportunities, as well as key market segments. The study addresses market dynamics in several geographic segments along with market analysis for the current market environment and future scenario over the forecast period.
The report also segments the market into various categories based on the product, end user, application, type, and region.
The report also studies various growth drivers and restraints impacting the market, plus a comprehensive market and vendor landscape in addition to a SWOT analysis of the key players. This analysis also examines the competitive landscape within each market. Market factors are assessed by examining barriers to entry and market opportunities. Strategies adopted by key players including recent developments, new product launches, merger and acquisitions, and other insightful updates are provided.
Research Process & Methodology
We leverage extensive primary research, our contact database, knowledge of companies and industry relationships, patent and academic journal searches, and Institutes and University associate links to frame a strong visibility in the markets and technologies we cover.
We draw on available data sources and methods to profile developments. We use computerised data mining methods and analytical techniques, including cluster and regression modelling, to identify patterns from publicly available online information on enterprise web sites.
Historical, qualitative and quantitative information is obtained principally from confidential and proprietary sources, professional network, annual reports, investor relationship presentations, and expert interviews, about key factors, such as recent trends in industry performance and identify factors underlying those trends - drivers, restraints, opportunities, and challenges influencing the growth of the market, for both, the supply and demand sides.
In addition to our own desk research, various secondary sources, such as Hoovers, Dun & Bradstreet, Bloomberg BusinessWeek, Statista, are referred to identify key players in the industry, supply chain and market size, percentage shares, splits, and breakdowns into segments and subsegments with respect to individual growth trends, prospects, and contribution to the total market.
Research Portfolio Sources:
Global Business Reviews, Research Papers, Commentary & Strategy Reports
M&A and Risk Management | Regulation
The future outlook “forecast” is based on a set of statistical methods such as regression analysis, industry specific drivers as well as analyst evaluations, as well as analysis of the trends that influence economic outcomes and business decision making.
The Global Economic Model is covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure. We aim update our market forecast to include the latest market developments and trends.
Review of independent forecasts for the main macroeconomic variables by the following organizations provide a holistic overview of the range of alternative opinions:
As a result, the reported forecasts derive from different forecasters and may not represent the view of any one forecaster over the whole of the forecast period. These projections provide an indication of what is, in our view most likely to happen, not what it will definitely happen.
Short- and medium-term forecasts are based on a “demand-side” forecasting framework, under the assumption that supply adjusts to meet demand either directly through changes in output or through the depletion of inventories.
Long-term projections rely on a supply-side framework, in which output is determined by the availability of labour and capital equipment and the growth in productivity.
Long-term growth prospects, are impacted by factors including the workforce capabilities, the openness of the economy to trade, the legal framework, fiscal policy, the degree of government regulation.
Direct contribution to GDP
The method for calculating the direct contribution of an industry to GDP, is to measure its ‘gross value added’ (GVA); that is, to calculate the difference between the industry’s total pretax revenue and its total boughtin costs (costs excluding wages and salaries).
Forecasts of GDP growth: GDP = CN+IN+GS+NEX
GDP growth estimates take into account:
All relevant markets are quantified utilizing revenue figures for the forecast period. The Compound Annual Growth Rate (CAGR) within each segment is used to measure growth and to extrapolate data when figures are not publicly available.
Our market segments reflect major categories and subcategories of the global market, followed by an analysis of statistical data covering national spending and international trade relations and patterns. Market values reflect revenues paid by the final customer / end user to vendors and service providers either directly or through distribution channels, excluding VAT. Local currencies are converted to USD using the yearly average exchange rates of local currencies to the USD for the respective year as provided by the IMF World Economic Outlook Database.
Industry Life Cycle Market Phase
Market phase is determined using factors in the Industry Life Cycle model. The adapted market phase definitions are as follows:
The Global Economic Model
The Global Economic Model brings together macroeconomic and sectoral forecasts for quantifying the key relationships.
The model is a hybrid statistical model that uses macroeconomic variables and inter-industry linkages to forecast sectoral output. The model is used to forecast not just output, but prices, wages, employment and investment. The principal variables driving the industry model are the components of final demand, which directly or indirectly determine the demand facing each industry. However, other macroeconomic assumptions — in particular exchange rates, as well as world commodity prices — also enter into the equation, as well as other industry specific factors that have been or are expected to impact.
Forecasts of GDP growth per capita based on these factors can then be combined with demographic projections to give forecasts for overall GDP growth.
Wherever possible, publicly available data from ofﬁcial sources are used for the latest available year. Qualitative indicators are normalised (on the basis of: Normalised x = (x - Min(x)) / (Max(x) - Min(x)) where Min(x) and Max(x) are, the lowest and highest values for any given indicator respectively) and then aggregated across categories to enable an overall comparison. The normalised value is then transformed into a positive number on a scale of 0 to 100. The weighting assigned to each indicator can be changed to reﬂect different assumptions about their relative importance.
The principal explanatory variable in each industry’s output equation is the Total Demand variable, encompassing exogenous macroeconomic assumptions, consumer spending and investment, and intermediate demand for goods and services by sectors of the economy for use as inputs in the production of their own goods and services.
Elasticity measures the response of one economic variable to a change in another economic variable, whether the good or service is demanded as an input into a final product or whether it is the final product, and provides insight into the proportional impact of different economic actions and policy decisions.
Demand elasticities measure the change in the quantity demanded of a particular good or service as a result of changes to other economic variables, such as its own price, the price of competing or complementary goods and services, income levels, taxes.
Demand elasticities can be influenced by several factors. Each of these factors, along with the specific characteristics of the product, will interact to determine its overall responsiveness of demand to changes in prices and incomes.
The individual characteristics of a good or service will have an impact, but there are also a number of general factors that will typically affect the sensitivity of demand, such as the availability of substitutes, whereby the elasticity is typically higher the greater the number of available substitutes, as consumers can easily switch between different products.
The degree of necessity. Luxury products and habit forming ones, typically have a higher elasticity.
Proportion of the budget consumed by the item. Products that consume a large portion of the consumer’s budget tend to have greater elasticity.
Elasticities tend to be greater over the long run because consumers have more time to adjust their behaviour.
Finally, if the product or service is an input into a final product then the price elasticity will depend on the price elasticity of the final product, its cost share in the production costs, and the availability of substitutes for that good or service.
Prices are also forecast using an input-output framework. Input costs have two components; labour costs are driven by wages, while intermediate costs are computed as an input-output weighted aggregate of input sectors’ prices. Employment is a function of output and real sectoral wages, that are forecast as a function of whole economy growth in wages. Investment is forecast as a function of output and aggregate level business investment.