The growing need for flexibility is entwined with shifting client preferences and market trends. A notable example is the automotive industry, where technological advancements, environmental considerations, and evolving consumption patterns are steering consumers away from traditional models of ownership.
While there are no set formulas to follow and a ‘one size fits all’ solution, both local and global automotive trends can be addressed in similar ways. For example, Belgians spend an average of 50 minutes on the road each day. When expanded worldwide, a theme of long commuting times and a desire for efficient, stress-free commuting solutions emerges. In Munich, for instance, drivers spend an average of 87 hours in traffic each year, while in Los Angeles the number rises to 119 hours. That’s almost five full days. Clearly, solutions are not only desired; they’re needed.
According to several studies conducted by McKinsey, Boston Consulting Group (BCG) and The World Economic Forum’s (WEF), there are a number of emerging trends in mobility and automotive technology that should be taken into account.
A shift away from private cars towards greener transportation
In the next decade, the way we move around is likely to change significantly. A major shift will be the decrease in the use of private cars, as governments and consumers push for greener and more efficient transportation. Advancements in technology may lead to innovative options like autonomous minibuses and urban air taxis.
People want a better travel experience, with many preferring a quick subway ride over an hour in traffic. Cities offering such convenience may see increased metro ridership. Sustainability is also a crucial consideration, with 46% of people already switching to sustainable brands and products, and an additional 16% planning significant changes for a greener lifestyle.
The emergence of autonomous vehicles (AVs)
Autonomous vehicles (AVs) are becoming a reality. AVs operate independently, with control over their own functions. They require either minimal input from a human driver or eliminating the need for a human driver altogether. Experts anticipate that, by 2025, passenger vehicles in Europe and North America are expected to integrate higher proportions of level-three and level-four automation.
Level 3 vehicles can independently make decisions thanks to their “environmental detection” capabilities. However, human override is still necessary. In contrast, Level 4 automation allows vehicles to intervene during issues or system failures without requiring human interaction, though manual override is still possible.
The benefits of micromobility
Additionally, micromobility offers numerous benefits, with flexibility being a key advantage. Micromobility incorporates mobility options such as (electric) bicycles, e-scooters, e-steps, and other short-distance vehicles. This flexibility makes it easier to move between destinations and switch between alternative forms of transportation, such as buses or trains. Additionally, micromobility stands out as a sustainable choice, contributing to emission-free mobility.
As of now, the global micromobility market already has an estimated value of approximately 180 billion dollars, or about 165 billion euros. The analyses indicate that the value could surpass double by 2030, reaching approximately 400 billion euros.
Intermodal travelling: an emerging preference?
In addition to micromobility, consumers are starting to develop a preference for intermodal travelling. This involves using various modes of transport during a single trip. Think of a car ride to the train station or cycling to the bus stop. Instead of restricting yourself to a single transportation option, intermodal traveling combines different modes of transport to reach a destination. Take the “Floya” app, for instance, which simplifies navigation in and around Brussels. It can be used to mix and match various transportation options, like cars, trains, metro, shared bikes, or scooters.
This also extends to shared mobility – a transportation ecosystem where various vehicles are available for short-term use by multiple people. Consumers seek convenient, cost-effective and sustainable options, and shared mobility has the potential to meet these needs. Experts expect this segment to generate revenues of up to 1 trillion dollars, or around 919 billion euros, by 2030.
The simplicity of subscription-based models
According to research by Deloitte, modern consumers view traditional car financing and leasing contracts as more of a burden than a benefit. Instead, they seek services that simplify their lives as a “one-stop-shop” solution. These solutions prioritize in-person consultation, personalization options, and provide consumers with peace of mind, total transparency, and cost control. The study anticipates a shift of over 22 billion dollars in new annual auto financing to the subscription segment by 2025.
Opportunities in tailoring financing contracts
Amidst this transformation in mobility, businesses can thrive by tailoring financing contracts to each client’s specific needs and goals. By presenting themselves as long-term partners and providing flexible terms, companies can build stronger and more lasting relationships with their clients.
Captives and leasing companies are in a prime position to benefit from customer relationships, resulting in increased loyalty and a wider array of product offerings. This expansion extends beyond traditional boundaries to include service-based models such as automotive insurance.
How to tackle the challenge?
The era of one-size-fits-all financial solutions is over. To thrive in today’s landscape, businesses must adopt an innovative approach and leverage technologies that support continuous market developments and cater to individual client demands.
Key to this is the adoption of MACH architecture principles, an acronym representing:
- Microservices: small, specialized software components designed to excel at individual tasks and collaborate with other pieces.
- API-first: a methodology for linking software components through standardized interfaces accessible to anyone.
- Cloud-native: an approach to running software on the internet, utilizing scalable services that can expand or contract as required.
- Headless: a strategy of dissociating the visual aspects of software from its underlying logic and data, enabling diverse devices and channels to employ the same software.
Designing software systems with the MACH architecture provides flexibility, scalability, and ease of change. MACH architecture proves valuable in crafting adaptable software that responds to evolving customer needs and emerging technologies. Developers can select optimal tools for each software component and replace them as necessary.