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0207 289 1043 ptaylor@veravis.co.uk

It’s all about mobility

If you have not already noticed, some profound changes are taking place in personal transportation, hitherto known as ‘car ownership’. While I believe the demand for independent personal mobility will remain as strong as ever the way in which this will be delivered will alter dramatically.

Many of today’s great brands may fall victim to these impending changes as the consumer moves away from the concept of ‘ownership’ to the provision of a service. The likes of Uber and Lyft are the precursors of this ‘hail a cab’ trend one of the consequences of which must be erosion in present-day brand loyalties. Travelling from A to B will depend as much on the service offered as on the brand of vehicle offering it. As already is the case with air travel, who knows or cares whether they are flying in a Boeing or an Airbus? It is the name of the carrier you remember. So it is likely to be the case with cars, let along the tyres fitted to them. Some of our car makers are already alert to these challenges and are hedging their bets with the likes of BMW and Mercedes buying into car sharing and ride hailing schemes, their new rivals are as much Google and Apple as they are each other.

Of course, these challenges are not the only ones they face because when it comes to powertrains, petrol, diesel, hybrid, all-electric or even hydrogen, the jury is still out. Add to them the likely advent of self-drive vehicles and we face a very complicated set of outcomes. So-far important factors like brand image, performance and even styling may soon resonate a whole lot less with the consumer.

So much for cars and carmakers but what may all of this mean for us tyre people? Undoubtedly there will be profound change to the current business model. With individual car ownership in longer-term decline the replacement market will likely be highly fleet dominated just as the truck tyre market in W.Europe is already today. Price and performance may count for a whole lot more than the brand itself.

Tyre makers will need to carefully think through these new and impending realities. The larger players will undoubtedly adapt but many smaller fry may fall by the wayside lacking the strength and size needed to effectively interface with original equipment (OE) and aftermarkets which will be increasingly bound together. The world today has too many tyre brands as I think we all know but we lack the collective will to deal with it. These impending changes to the way we own and use cars may prove to be the dynamic which sorts out the problem.

The anticipated rise of the electric car

(% of all cars sold by region)

 

Europe <1 5 30
USA <1 2 5
Worldwide <1 3 13
2015 2020 2025
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