Digitally-enabled car-sharing and ride-hailing is set to become a key driver of growth and profitability in tomorrow’s auto markets, far outstripping the profitability potential of traditional car making.
OEMs are established masters of vehicle mass production and thus very likely to dominate the manufacturing of autonomous vehicles that will turn mobility as a service into a mass market. They still occupy the critical interfaces between products and services, hardware and software. And their brands, powerful distribution networks, and customer following can help build and sustain mobile services at scale: the key to success.
But they will also need bold new strategies to bring these strengths to bear. Auto executives must make smart choices about where and how to play. They will also need to execute on these choices—and fast. New entrants are setting the pace and right now, despite their impressive car-sharing and ride-hailing experiments, OEMs are struggling to keep up.
The key to long-term success is scale. And OEMs are in pole position to leverage it—so long as they can bolster their existing capabilities around designing and manufacturing cars, and build new capabilities around ideating, testing, and rolling out mobility and digital services. Working with strategic partners, including competitors, whose strengths complement their own will be essential: often, indeed, the only way to scale platforms and service offerings quickly—a must-have in digital business, where size matters.