We stand on the threshold of another year. Of another decade. But it is impossible to overemphasise how fast the current pace of change is.
Look at the headlines in The Financial Times, Automotive News Europe, or even the Wall Street Journal. Serious players like VW have stuck their hands up and said they need urgent reform. “They do not want to be the next Nokia”. Serious analysts are looking at the structure of the European and world automotive industry and saying the changes needed are fundamental and urgent. Consumers are looking at the world and saying unless we all make changes, then things like climate change and environmental damage could become irreversible not just for a grandchildren, but for our children and ourselves. And 2020 is a crucial year for the EU and for European car manufacturers in particular, as they face up to the challenge of CO2 emissions and enormous fines for getting it wrong.
Let me read you headlines from the front of one of the leading European automotive websites. “Fiat Chrysler and iPhone maker plan Chinese EV joint venture”. “Germany plans aid for struggling auto industry”. “Toyota makes a new $394 million bet on the flying taxis. “VW needs urgent reforms to avoid Nokia’s fate”. That is just the top four headlines, change will define this decade like never before.
Added to which, every single manufacturer that we know is urgently talking about electric vehicles and hybridisation. Some are very late to the party others, such as Tesla, are completely new entrants to the market.
To my mind this harks back to the mid-80s when computerisation had just begun. At first the technology was pretty rudimentary, highly inefficient and early adopters spent a fortune on implementing a computerised solution. I remember the first serious computer for our business cost £12,500 in 1989, it had 100K of RAM and 1 MB of hard disk storage. Most wristwatches and Fitbits have more computing power nowadays and can be bought for as little as £15. So it will prove with this new technology, and over the next 10 years we will not be able to believe the pace of change.
And this is what is worrying retailers everywhere. Because as technology changes so rapidly, so do retail and aftersales models. I have used this analogy before, but it was the 50th anniversary of the moon landing last year. Many families bought a colour TV to be able to watch it (irony of ironies, all footage was in black-and-white) and just a few years later all TVs moved from being valve based to transistor-based. Your high street TV shop employed teams of technicians and used to rely on a six-month service and valve replacement in the old TVs, just like current motorcars. Within five years that service became irrelevant. How long before electric vehicles make our industry go the same way?
And in case anyone thought that the European car market was going berserk, it was up 21% year-on-year in December, think again. The smart money is on vehicle manufacturers destocking last year all of their gas guzzling models, because this year they are going to be judged on their model mix and emissions. So they had to clear the decks before 31 December.Have a great weekend. Enjoy the cricket.
I always wanted to be somebody, but I should have been more specific.
Jane Wagner, (and Lily Tomlin)
The great tragedy of Science – the slaying of a beautiful hypothesis by an ugly fact.
Thomas H. Huxley (1825 – 1895)
It is easier to fight for one’s principles than to live up to them.
Alfred Adler (1870 – 1937)
My life has no purpose, no direction, no aim, no meaning, and yet I’m happy. I can’t figure it out. What am I doing right?
Charles M. Schulz (1922 – 2000)
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