Over the last years, startups have starting to emerge in the car industry with examples such as Uber, Tesla or Blablacar. However, this remains at an early stage and experts are wondering if this is a sustainable trend that will fundamentally transform the industry. The consultancy firm Oliver Wyman has elaborated a few leads in a study that will be summarised in this post.
When thinking about changes in the car industry, we first think about electric or autonomous cars. Nevertheless, the study conducted by Oliver Wyman first pointed the transformation of the startup ecosystem as the main event of the last years. Indeed, according to them, since 2000 more than a 1000 startups have been created and significantly impacted the market. For instance, Blablacar, a french carpooling service has invested around 340 million dollars since 2011. Together, they account for 50 billion of euros in investment over the last 5 years.
These young firms do not position themselves as the old main players, but try to compete differently by disrupting the market. In order to so, they strive to elaborate innovative solutions for the whole supply chain. Hence, we observe investments in R&D, sales, services, resources.
So far, the most significant examples lie in the mobility service sector. Indeed, companies such as Uber or Lyft have experienced impressive growths and many opportunities remain : car sharing, parking solutions, carpooling. The proliferation of these new services have also changed user/consumer behaviour, thus disrupting the market. According to Oliver Wyman’s study , the share of mobility services in the car industry will be multiplied by 3 in 2025.
Environmental issues are also being tackled by these startups. The market for “ecological” cars is booming. Tesla, Charge point and Aleees are constantly innovating, launching new products and reducing their costs. Tesla cars are for instance getting more and more affordable for customers, such as the company has important waiting lists for its products. The study expects the share for hybrid vehicles to account for 17% in 2020.
As we can see, the car industry is changing and evolving in many of its different sectors. The rise of startups have enhanced innovation, giving birth to new services and opportunities, but technology has also changed user behaviours and habits. The market has thus been transformed in terms of user needs thanks to these startups. Based on this, I think we can reasonably assess that this phenomena will sustain and keep growing, pushing some historical actors of the market out.
Sources
https://www.maddyness.com/innovation/2016/10/05/automobile-bouleversement-startups/
