The future of the auto industry: Three experts place their bets - Part II

Our Leading Business by Design: Automotive Sector report – an in-depth analysis of strategic design’s impact on the passenger automotive sector – is now available on Amazon.

The research investigated several forces affecting the wider automotive ecosystem, including increasingly connected vehicles and the entry of tech giants like Google and Apple, autonomous cars, the rise of the sharing economy and a greater interest in sustainability. 

With the copies of the report now available on Amazon, we asked three insiders for their predictions about how these changes might pan out.

Our second expert is Megan Neese, Senior Manager at Nissan’s Future Lab, which is based between Los Angeles and Sunnyvale in Silicon Valley.

What is Future Lab?

Future Lab is a cross-functional team tasked with examining the future of the industry and identifying new business opportunities for Nissan. We act as an incubator and build prototype projects to demonstrate what that future could look like. Many of the challenges we face in the future of the automotive industry stretch beyond our definition of product. We did not have a process in place for incubating these ideas and so Future Lab came to be to do just that.

What automotive trends do you foresee in the future?

The convergence of three major trends - Urbanisation, Collectivism, and Intelligent Technology - will transform the automotive industry in time. Cities are becoming huge metropolises, like Mumbai, where there is no single discernible “centre.” Travel patterns going from one suburb to another can be just as congested as the traditional model of going to and from the suburbs to “downtown.” This changes the nature of transportation planning - demand can rarely be met by public transit, and yet private vehicle ownership burdens the system as well. The types of products we make and who they are for may fundamentally change when we try solving these larger system-level questions of mobility.

The sharing economy has already brought new types of business models and competitors to the industry.

Car companies like Nissan are accustomed to selling products to individuals but these questions force us to consider a broader collective. For example, the sharing economy has already brought new types of business models and competitors to the industry. Service providers like Uber are significantly lowering the cost of pay-per-mile mobility. These new models challenge the notion of personal ownership and break apart the traditional automotive value chain. At the same time the impact of intelligent technology could help solve many of these system-level problems, because we can begin to collect and analyse data at a much grander scale and see the impact that solutions are having.

 

Why do you think the tech industry is interested in automotive?

From my understanding, they need to expand into new markets, and they want to find places where a lot of data is generated. Already today vehicles are loaded with sensors but a lot of that information isn’t being captured in any real way, let alone being analysed or monetised. And that’s the thing that a company like Google is really, really good at.

 

How do you think people will take to autonomous cars?

They’re sort of already taking to them. We have become reliant on many intelligent systems in our cars today - for example, even anti-lock braking is a kind of intelligent assistant. Modern safety systems like Adaptive Cruise Control and Active Lane Control have built on that same concept of assisting the driver.

The promise of fully autonomous vehicles is probably the most talked about trend in the industry today.

But the promise of fully autonomous vehicles is probably the most talked about trend in the industry today. What an awesome thing to imagine…super-efficient highways, a solution to the last mile with personalised pick-up and drop-off points, huge gains in efficiency and therefore sustainability. We know that developments in artificial intelligence could make a sweeping impact on our industry but, like other exponential technologies, the timeline of implementation feels hard to predict today.

 

How do you think traditional car companies will move toward autonomous vehicles?

Car companies have a safety first approach, with a strong sense of responsibility for passenger safety. There is historical precedent for this: just think of some of the industry’s biggest recalls. You really can’t introduce something from the National Highway Traffic Safety Administration’s (NHTSA’s) perspective that isn’t very, very safe. Even something like changing the configuration of seating is a huge endeavour as far as investment and regulatory acceptance are concerned.

 

Doesn’t Google have regulations to follow, too?

Sure they will - NHTSA will ultimately determine what is legal for them too. So far they have local support, specifically where they have been testing in the Silicon Valley, but not support at a national level. If you want to roll out a fully driverless car for sale in France, for example, you’re going to have to get the French government on board. Car companies think on a global scale right out of the gate, whereas Google seems to be starting locally in order to demonstrate and build momentum.  

 

What are some challenges you face at Future Lab?

One of Nissan’s big challenges is around experimentation. How do we experiment in a micro way without building an expectation from the customer that we have launched a fully developed new product or service?  Tech companies have built this expectation with customers already, so when Google cancels a product in their portfolio it’s not a big deal. At a car company, if you cancel a car, it’s a huge deal. We have to find new ways of experimenting without muddying customer expectations.

 

What are some of the projects you’re working on at Future Lab?

We’re trying to understand the future of urban form. The nature of urbanisation is not an imagined mass migration from rural to urban. It is a point in time where the growth of the current urban population outpaces and then outsizes the rural population. Thus our cities are really growing from the inside out.

As residents of these cities, we expect to be able to move around them but increasingly cities are grappling with this increase in population and therefore congestion, pollution, and sprawl. The invention of cars had a sweeping impact on urban form in the last century and we think there may be a new (more sustainable) model for this today.

 

How is future thinking within the car industry evolving?

Ten years ago, a car company executive might have said: once everyone has a car, that’s success. And I think that’s what’s changing. If you look at what is actually happening with all these new trends like the sharing economy – is everybody owning a car really the goal? Or is it about providing mobility to all these different people in different contexts?

We’ve really been focused on trying to understand what the future consumer wants.

To answer that question, it’s necessary to know what people need. Where are they going? How are they getting to work? Why are they driving or what are they using as an alternative to a car? We’ve really been focused on trying to understand what the future consumer wants.