A lot of people are convinced that the transition from internal combustion engines to electric and autonomous technologies is the most important issue facing the automotive industry.

While they are certainly important changes, we see the customer model as the issue that will most impact businesses in the future. Here, change is inevitable because of two clear trends: the emergence of car usership rather than ownership and the disruption of the dealership model. 

From ownership to usership

The way people relate to cars is changing, with car ownership being replaced by car usage through ride sharing schemes and subscription services. New drivers are not as infatuated with driving as I was at their age. They are looking for a transportation service, not an expensive luxury to house in their garage and spend their weekends cleaning and waxing. 

Today, young people consider transportation as a utility, not a lifestyle accessory.

Urbanization is encouraging this change and the speed will be most dramatic in major cities. London has already limited the volume of cars allowed into the city and Chinese cities have similar restrictions.

Supply chain of the future: Self-delivering cars 

Reducing automobile congestion in cities will have a higher focus all around the world. Sooner or later, owning and driving your own vehicle will be considered a luxury rather than a right.

The dealership model will be disrupted

Currently, acquiring a car is a B2C transaction, most often involving a dealer. As ride hailing and car sharing take hold, and the trend of usership versus ownership continue to develop. Today’s dealer and sales distribution model will be disrupted, and new customer segment will emerge. 

Over time, we believe that a significant portion of future automobile sales will shift from consumer purchases to fleet

Estimates show that by 2040, as much as 45% of all automobile sales in developed markets will be to fleet operators, rather than to individual consumers. Of course, fleet sales have long existed in the automotive industry, but we will soon see a new customer segment: Fleet owners that lease vehicles to ride sharing companies.

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Think about it. Why would a fleet owner work through a dealer when they could go right to the manufacturers? Their leverage in dealing directly with an OEM will be significant. The owner of a fleet will deal directly with the OEM and buy hundreds or thousands of vehicles directly, not from a dealer. This will ultimately change today’s dealership model.

The service model of the future

As the technologies of electrification and automation take hold in the automotive industry, the technical services offerings we perform today will need to evolve. The anticipated disruption to the automotive sales and distribution channel will create a target rich environment for Wallenius Wilhelmsen Solutions to grow and develop new opportunities all across the automobile distribution value chain.

Electric vehicle services will be unique from combustion engine services.

Internal combustion engine vehicles have 30,000 parts, whereas electric vehicles have barely 1% of that. This means they will have less maintenance requirements, but other needs that don’t necessarily exist today. Charging is obviously an important element of the services portfolio, but as the number of electric cars continues to grow and battery technology develops, charging infrastructure will become less of an issue.

Mike Hynekamp: Shaping the future together 

With smooth manufacturing comes the potential for a dramatic change in the distribution model. Will OEMs still invest billions of dollars in large production lines, when 3D-printing and other on-demand technologies can assemble a finished vehicle anywhere in the world? This will change the supply chain, and that’s something we will be ready to adapt to.

A change in the pace of change

The buzz and excitement surrounding autonomous vehicles of a few years ago has cooled, so much so that research firm Gartner has changed their position on the speed of transformation

Researchers are now putting autonomous vehicle drive technology into the “trough of disillusionment” portion of its “hype cycle” tracker, a signal that the early irrational exuberance around the imminent arrival of the technology is clearly waning.

Autonomous cars will certainly be a big part of our future, but the technology won’t be here tomorrow

While electric vehicle sales continue to grow, we’re unlikely to see a massive shift in global demand until battery technology improves and eliminates range anxiety, while bringing cost parity. We see both of these developments occurring in the next 5 to 7 years

Rebekka Herlofsen: The world will keep surprising us

As the technologies still need time to mature, I believe that the change, while inevitable, will be gradual. Nevertheless, at Wallenius Wilhelmsen we are listening to our customers and studying the evolution of new technologies, actively planning for all future scenarios