5 truths automotive executives admit about mobility initiatives: the surprising results

Three years ago, I said the automotive industry was like the Wild West with the onslaught of technological change disrupting the industry and the number of companies rushing to get their piece of the “mobility treasure.”

Today, it’s like the Dot-com boom. There are many mobility-related investments and mobility initiatives - and many of these, unfortunately, will be losing investments. The media buzz we are hearing is not aligning with reality.

Mobility initiative investments are essential to the survival of automotive original equipment manufacturers (OEMs) and Tier 1 suppliers given how the automotive industry is undergoing unprecedented change. But these investments are not yet creating tangible business impact.

Logically, it makes sense in the aggregate, since there isn’t a critical mass of autonomous vehicles on our roads, for example. But the devil is in the details here.

We recently surveyed nearly 150 executives at OEMs and Tier 1 suppliers and drew five surprising conclusions from their responses:

1.    Budget busters: Despite increasing budgets, a clear majority of executives (83%) feel that new mobility initiatives are not contributing to their company’s bottom line  

2.    There’s a ways to go: Only 20% of executives surveyed believe they have found effective business models for new mobility initiatives

3.    No love lost in M&A: Acquisitions aren’t having their expected impact. Those related to new mobility initiatives have had a nominal or negative effect on their core business, 84% of executives admitted

4.    A profitable target group is unclear: Executives are undecided about where mobility initiatives have been most effective - 27% of those surveyed say direct to consumer, while 25% say business to business is best

5.    Dollars flow from data: Almost one-third (32%) of executive respondents believe data monetization has the greatest future potential to generate real business impact. They ranked this over the next closest categories of software as a service (20%) and direct to consumer (18%)

The most profitable and successful OEMs will be the ones that translate opportunities emerging from societal trends and disruptive tech into previously unimagined customer experiences and services. Whether the global economy is stable, flourishing, or slowing, tangible business impact is what will make a mobility initiative worth its weight in gold.

Contact me here on LinkedIn for more information about Thirdware’s annual State of Mobility Study.  More to come!