Third Automotive Forum for the Future at Babtec: Away from Vehicle Sales?

During the third Automotive Forum for the Future held in the Bergisches Land region , taking place at the premises of the CAQ software manufacturer Babtec, André Girnus presented surprising new business models by vehicle manufacturer Mercedes Benz.

If you listen to André Girnus, who has been with Mercedes Benz since 1999, you might think that vehicle construction has become a minor matter there. And, to a certain extent, that's true, because Girnus does not work in Stuttgart but in Berlin, namely at the "Mercedes-Benz Vans Mobility GmbH" subsidiary. And there, they mainly think about one thing: mobility. However, in their eyes, mobility does not necessarily start with the possession of your own vehicle. A brand-new concept for Mercedes Benz, as the GmbH was just entered into the commercial register in September 2016.

In terms of content, the Berlin office – which is also to be visually distinct from the parent company – is concerned with the topics of urbanization, i.e., the fact that more and more people (want to) live in cities; digitalization, which should make life as easy as possible; individualization, which no longer relies on mass-produced goods but on individually customized products; and sustainability with a view to the fact that resources are finite.

These four topics, or "megatrends" as Girnus calls them, do not stop at the subject of transport, as we see above all in the USA. Here, packages are no longer delivered only by logistics companies, but also by Uber drivers, who are already competing with taxi companies. And the so-called last mile from the main roads to the residents is already being covered by drones and the like, instead of with vehicles. The companies behind all this neither develop their own vehicles nor provide them, as Uber shows: Here, only the software was created that allows private individuals to work as registered taxi drivers with their own vehicle. The idea is that, if you do not have any passengers at the moment or if you have to go to a specific location anyway, you may as well also take along and deliver some parcels. The drivers receive their information for this from the software, which coordinates everything. However: The responsibility for the delivery, including risks and costs, is also transferred from the company to the software users.

Learning from the Past

For the "Vans Mobility GmbH", the question arises as to what this development means for car manufacturers. Because the company has many negative examples in mind, such as Kodak, once a global leader in photography, and Nokia as the same in the field of mobile phones, both outdated by companies that came from completely different areas. And this development continues, according to Girnus: New competitors are entering the market, such as new fintech companies in the field of financial services or Airbnb in the tourism sector, offering business models established companies have yet to discover. The Google Car is one more example, which in this case attacks the car manufacturers, as the Mercedes representative puts it. The second question thus should be: What can one learn from such companies?

Another important factor is that the (new) framework conditions must also play a role in these considerations, as young city dwellers today are less and less likely to have their own vehicles. So, what do customers want? For example, an offer with reliable access to the vehicle you need for a particular occasion such as a small car for everyday use, a truck when moving, and for the holidays, a family-friendly utility vehicle. That could be one answer. Such an offer could then be available, for example, through other companies – but with the risk that the manufacturer’s own brand increasingly slips into the background, and the customer might just wander off to the competition at any time. Another solution could be to cooperate with other companies through co-participation or even a complete takeover. This, according to Girnus, is exactly the strategy of Mercedes Benz, because it is the only way to keep the customer loyal and to provide them with individualized offers.

Freedom of Thought Creates New Pathways

However, Mercedes Benz is not the only one to decide these things. For example, Amazon and Deutsche Post are driving forward the development of an electrically powered van at the company, confesses Girnus. One variant would be a van with loading robots or drone landing pad on the roof. Such ideas have to be developed today in order to acquire the experience needed to gain an edge on the markets of tomorrow. However, that requires a certain freedom of thought, which is otherwise not too prevalent at Mercedes, according to Girnus. Therefore, the founding of the GmbH, which, up to the purchasing department, is completely independent from the parent company, and therefore also has its head office in Berlin, far away from Stuttgart.

And what ideas came into being during the first six months here? Well, there is the suggestion, for example, to offer their own fleet for leasing. This way Mercedes could bypass the route via providers such as a car-sharing companies, which in the past have shown little brand loyalty. The leasing offer could be available on the market starting the middle of this year. Customers are to be both private individuals as well as companies whose fleet is sometimes overextended. Whenever the necessity arises, they will be able to lease extra vehicles for as long as necessary. However, considerations also include customers who wish to rent vehicles in the longer term. Those would then be built according to their wishes.

Another idea is to develop a platform where individuals can rent out their vehicles when they do not need them. This could be, for example, a van which would not be needed at night. In the US, this is supposedly already a common option, among other things, for financing vehicles that one otherwise could not afford. It is also possible to take over fleet management services for other companies and initiatives. There is currently a pilot project with the Berliner Tafel, a non-profit organization operating food banks throughout the capital. They need to know when and where donations can be picked up – and they must be able to assign this to a driver or vehicle currently in the vicinity. The directions are then provided to the driver, for example under the aspect of traffic jams or gas-saving routes. To better utilize the fleet, such measured values as vehicle size, delivery quantity, whether the goods need to be cooled, and much more are included.

Girnus closes with a recommendation to the representatives of the automotive supplier industry in the Bergisches Land region: Do not stick too religiously to what might have made your company big and strong in the past. Also do not to focus on profit, but rather on the purpose of your actions. Here it could be helpful to develop new ways of working, such as networked work, where teams from different areas continuously work together on a project.

If you choose this way, however, it will also be necessary to accept the decisions that have been taken in conjunction – even though your management may not like them. And whoever is able to afford to do so, should have a "weird ideas department" where anything goes without limitations. In the best case, your “weirdos” might even find new business models for you! For Stephan A. Vogelskamp as manager of the Bergisches Land Structural and Economic Support Association, the question arises in parallel how the companies in the region can work together in this sense in order to remain on the market rather than ignoring developments. According to Vogelskamp, this is exactly where the association is headed.


 Author: Silke Nasemann, Editor Bergische Blätter

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