Findings from the Freespee and Fidelio roundtable during the Automotive in the Extinction Rebellion World: How Diversity and Innovation can Contribute to the Industry’s Response to Climate Change’.
The automotive industry is going through a period of huge transformation where more innovation, new skill sets, and greater diversity will be essential for success. Automotive firms are required to listen to the customer voice, make this voice the epicentre of all their strategies, their narratives, and future plans.
Last month, a select number of leading C-level automotive industry professionals invited by Freespee CEO, Anne de Kerckhove, and Fidelio Co-Founder and Head of Chair & Board Practice, Gillian Karran-Cumberlege met at the ‘Automotive in the Extinction Rebellion World: How Diversity and Innovation can Contribute to the Industry’s Response to Climate Change’ event.
The topic of the day revolved around climate change and how the industry can fit within that new narrative. It became apparent that each OEM must develop their new narratives by listening attentively to the customer voice — and always focusing on customers when making decisions.
Consumers and climate change: Are Electric Vehicles their only alternative?
The recent valuation of Tesla, now second most valuable brand behind Toyota, has confirmed the importance of a strong narrative in the automotive industry, despite Tesla selling just 0.4m cars last year compared to Toyota’s 10.7m. Several of the participants questioned the valuation and raised concerns about the steps taken by some governments who have brought forward plans to ban the sale of any vehicles other than electric vehicles (EV)s. According to these participants, battery-powered cars are not the only way to reduce carbon footprint and other technologies, such as hydrogen should also be considered.
Whilst the perceived valuation of native EV brands and their products paints the picture of a promising future, industry and governments have a huge challenge ahead to ensure wider adoption in the short term. Limitations on the EV charging infrastructure, high price tags, short battery life, the inconvenience of charging from home and unclear regulations are all blockers for mass adoption. It will be down to ‘Fast Follower’ OEMs’ and governments’ support that will transform the EV industry into a mass production business that caters for the remaining 99% of the population.
Finding a ‘New North Star’ – How ‘Fast Followers’ Will be Able to Innovate.
Whilst there are clear challenges to wider electric car adoption, it is undeniable that Tesla, the 17 year-old California-based company market disruptor, owes much of its success and mesmerising growth in value to their strong narrative.
They are evangelists for climate change, deeply connected with their audience and can be seen as both, an automotive manufacturer and a tech company. Their customer experience sets a modern benchmark; knitting together personalisation at scale, speed, and convenience and has become an aspirational model appreciated by consumers around the world. However, Tesla is still perceived as elitist to some, and both the digital and automotive industries are still very much male-dominated businesses that lack diversity.
During the event, participants highlighted how the traditional automotive groups and brands lack this type of strong narrative, which is preventing them from innovating and turning them into ‘fast followers’. Defining a new narrative that can reflect the need for innovation will require new leadership, new skill sets, and new partnerships with cities, governments, and stakeholders across the value chain. Binding it all together is the voice of the customer, which will help each OEM find their market niche.
OEMs are not finding innovation easy because as an industry that has operated in the same way for over 50 years, they don’t know where to start. Some of the suggestions raised included creating a global consortium of professionals, from every part of the value chain, to help the industry navigate future challenges, requirements, and limitations and, also, identifying tools to collect customer data and harness insights to enrich their narratives and influence decision making, both internally but also externally, at government level. But above all OEM’s must focus on defining their new North Star and ambition.
How will greater diversity at the Workplace and among Stakeholders help?
The automotive customer landscape has changed dramatically. 30 years ago, the buyer profile was predominantly male. Today women make 85% of the buying decisions (Automotive News, 2018) and hold 51% of vehicle licenses in the UK.
Despite women’s decision-making power, the industry has ignored this new reality. Cars are still designed for men, putting women in a vulnerable situation. As a result of this, women are 73% more likely to be seriously or fatally injured in car accidents.
Diversity has not reached the workplace either. Initiatives like Automotive 30% are working hard to promote diversity across the automotive industry and some of the participants attested to this by proving some of the OEMs are already hitting these targets. However, much work remains to be done. In the US, only 19.2% of dealership workforce are female – 5% of the General Managers and 1% of service technicians (NADA Dealership Workforce, 2018). As a result, 75% of women who enter a dealership feel misunderstood (Bank of America) and leave without purchasing a car.
The effort to attract diversity should not stop at bringing women onboard. The industry needs to work on initiatives and changes that retain this talent – flexible work, fair promotions, equality in the treatment and overall appeal of the job should be considered too. To achieve this, work needs to start much earlier. Starting in the classrooms, educating girls, showing them professional opportunities in the industry and getting them closer to female automotive role models so this career path is normalised very early on.
Diversity needs to be extended to reach new generations. Preferences among millennials are changing from buying to leasing and sharing. Participants agreed that current decision making needs to expand to include the preferences of those that will need cars in 15 years. The industry needs to keep an open dialogue, and open mind, to understand emerging trends and customer preferences so they can devise strategies to accommodate the needs of future buyers. Not all commuters will want to buy a car, there are other options and it’s important that brands are open to listen. A strong brand narrative will revolve around the vehicle and how it fits the needs of their audience, regardless of how the car is used.
Sharing Customer Data With Government For Better Involvement
The automotive industry is desperately playing catch-up when it comes to addressing government-led restrictions and regulations to tackle climate change. Initiatives like the recent announcement by the UK government to push forward the ban on diesel and petrol car sales to 2035 have a huge impact on their bottom lines. OEMs need more support and closer alignment with governments to be better prepared in the future. The consensus is that by working together, industry and governments will be able to devise better future plans.
The current low-carbon footprint vehicle market is filled with uncertainties and unknowns. Governments need customer data to understand future customer trends and be prepared for any changes that might happen. The EV market needs greater support from the government to create the infrastructure required to incentivise consumers to buy electric cars. Initiatives to set up wireless charging points are good first steps but more needs to be done.
Freespee – Learnings from the automotive sector
During the event participants shared the challenges the industry is currently facing and the steps to be taken to reinvent themselves.
- OEMs need to work with technology companies, partners and governments to build future-proof business strategies that better prepare them for future challenges. The global assumption lies on the need to keep customers at the centre of the spider web of decisions. How effectively this is done across all communication channels (web, marketplace, phone and in-store) will boost their brand, engagement and ultimately position in the market .
- Strong new narratives closely aligned to the customers’ needs are essential. OEMs need to maximise reach consumer interaction, on-line, by phone and at the dealership to present their value to customers, today and in the future. Dealers must have within their immediate grasp much better knowledge of the customers’ journey in real time and address those needs on the spot.
- To represent a changing customer base OEMs will need to embark on a complete transformation driving diversity to the workplace, attracting new leadership and skill sets. The transformation will impact their business model too, through a digital transformation that will make possible the delivery of a seamless omni-channel strategy that enables them to talk and engage with customers the way they want.
OEMs need to focus their efforts on bringing this customer voice forward, and use the insights to redefine and develop their narratives successfully into the future, in partnership with their dealership and retail touchpoints. You can find out how OEMs and their dealerships can overcome these challenges together, here.
Freespee has a track record in helping OEMs and their dealers gain insights on customers’ intent, by tracking online and offline behaviour and their perception on the customer experience received. This data helps companies get closer to their customers and deliver a better, more personalised buying journey that accelerates sales. To learn more about Freespee please contact us here: firstname.lastname@example.org