Carmakers fail to understand young people, minister claims

November 29, 2016

A German minister has accused carmakers of failing to understand the needs of young people when developing new products.

Sigmar Gabriel, the German minister for the economy, claims that companies such as Google are better placed to respond to changing consumer demands.

He told a national conference of the workers’ welfare association Arbeiterwohlfahrt: ‘There are a lot of young people who want to have mobility in the future, based around an internet platform. Google knows more about their mobility wishes than BMW, Daimler or Volkswagen.’

Gabriel’s comments come despite manufacturers investing heavily in adapting to the changing mobility needs of consumers.

For example, BMW’s DriveNow service currently has 700,000 users in 10 markets, which has driven detailed insights into consumer requirements.

Its average utilisation is two to five hours per day, up to five times the typical use of a private car, the business says, with car-sharing service customers typically requiring vehicles for 20-40 minutes per rental.

Over the past year, membership at Daimler-owned Car2go has leapt 43% to reach 2m members.

Volkswagen has invested nearly €300 million in ride-sharing service Gett.

Ford is trialling a range of products as part of its Ford Smart Mobility programme which it says is designed to provide insight for the eventual launch of its global mobility services.

Yet concerns about understanding the future mobility needs of young people have prompted the European Commission to invest €1.3 million in a university-based scheme.

The five-year European Network for Sustainable Mobility at University (U-MOB LIFE) programme is led by the environmental consulting company Novotec Consultores and initially involves four universities in Italy, the Netherlands, Poland and Spain.

The network will exchange best practice about sustainable mobility, ranging from car sharing to bike hire schemes and public transport. It aims to involve universities throughout Europe.

In France, Germany, Italy, Spain and the United Kingdom, there are about 11 million university students.

Research in the US found that the median age of ride-hailing app users is 33, with 18-29-year-olds seven times more likely to use the services than those aged 65 or above.

According to Autovista Intelligence’s Mobility Intelligence report, the mobility market is in its infancy and there are no tried and trusted business models; businesses will need to experiment to find the formulae that resonate most strongly with consumers.

This could represent the biggest challenge for established players. Manufacturers have built a business based on heavy investment in research and development to create new vehicles, only bringing them to market when they have been tested fully to ensure reliability.

Effectively addressing the mobility market will require companies to operate at a different pace from their historic one.

The future of mobility services…

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