Automaker focus must shift from vehicle platforms to service delivery platforms

There is considerable change taking place across the automotive industry right now. Electric cars are more than a new powertrain in the industry, and the technology requires significantly less servicing and fewer high margin spare parts sales than traditional combustion engine technology. This, in turn, severely impacts the profits available through current business models, and also removes a reason for customers to visit dealers.

Furthermore, connected car technology means software updates can be delivered over-the-air to vehicles, which is both a cost saving and an opportunity for automakers to continuously upsell new downloadable digital services. But automakers must also address new competitors from the tech industry in a ‘battle for the dashboard’, together with changing attitudes to car ownership as millennials switch to mobility services.