We see the basis for a transport revolution.
There is broad agreement that the car industry is facing profound changes. One of the examples that may be drawn forward is the General Motors chief executive, Mary Bara, who says that the car industry faces bigger changes over the next 5-10 years than we have experienced in the last 50 years.
Møller Mobility Group has for over 80 years helped to solve people's mobility needs. Our business model has historically been based on a car ownership model, with an increasing proportion of financing in recent years. We are at a breakpoint today where technology, sharing economics, regulations and changed customer preferences drive the development of the ownership model towards new service-based mobility concepts.
We already know that the cars will become electric, connected to the internet and that technology can take over more and more of the driver's tasks on the road to self-propelled cars. Each of these developments will have a significant impact on the value chain as we know it today, but it is primarily when we see the interaction between technology and business models we see the basis for a transport revolution. An electric, self-propelled car shared between several users on a platform (TaaS model) has the potential to reduce today's car rental costs in urban areas by 80-90%. This may seem like a distant dream, but technology companies like Uber have a goal of launching this model within five years. Then the automotive industry meets its new "Netflix competitor" where customers can subscribe to one or more mobility services.
Large revenues from new mobility services
The valuation of Uber helps to confirm the potential behind this future. At the time of writing, the company's value of Uber is approx. $ 15 billion higher than General Motors. In Møller Mobility Group we are preparing to replace more than 30% of today's revenues from new mobility services by 2030. A key issue we are working on is how the value chain of the future will look and what role we will play. It is natural to draw parallels to the development of the aircraft industry when we look at the automotive industry's development towards mobility services. The aircraft industry has undergone a shift towards specialized business models where you have one operator of the aircraft (eg Norwegian), one that maintains the aircraft and one or more parties that finance the aircraft. In addition, revenue flow has shifted from the journey itself, to services sold during the journey itself. In this future, dealers can be a natural operating and maintenance partner on fleet cars. Cars are a physical product that requires space and infrastructure, and we believe that the dealer will play an important role in the future as long as we are able to adapt.
HYRE – the carpool service for the next generation
Møller Mobility Group will make major investments in new mobility services to learn and to position us to develop future mobility solutions. One of this investments is the establishment of the car pool Hyre together with eight dedicated entrepreneurs. HYRE is a service that facilitates customers to easily share the car with others when they do not use it themselves- only by using a digital key at the smart phone. For the customers, this will be an app that gives a safe and easy access to rent a car through a mobile application with automatic settlement of toll and fuel consumption. We will initially pilot Hyre in demarcated areas of Oslo and will market and roll out the service broader after gaining user experience. The car sharing service represents the first of several initiatives that will come from Møller Mobility Group in the coming years.
We have also taken the initiative to form MobilityLab, established through a collaboration between Startuplab and a number of leading business actors. The aim of the project is to contribute to more growth-efficient technology companies that contribute to solutions to future formidable transport challenges. In addition, creating new Norwegian jobs. MobilityLab will also facilitate new businesses, modern workplaces and new mobility solutions that can bring great socio-economic benefits.
Good relationship with Volkswagen AG
The Volkswagen importer contract was signed in 1948 and we have been working close since our cooperation. In its new strategy, the Volkswagen Group has stated clearly that they will become a world-leading provider of sustainable mobility. They have given the strategy the name "TOGETHER - Strategy 2025", where half of the business should be as we know it today, while the other half will focus at new areas. As such, our strategy is also synchronized with the plant's plans.
Volkswagen Group has also launched the car industry's most ambitious electrification initiative with Roadmap E. This implies, among other things, that the Group's brands will launch 80 electrical models by 2025. Of these, around 50 will be full-electric, while 30 will be chargeable hybrids.
The "Roadmap E" electrification initiative will make Volkswagen also have electrical versions of its entire model portfolio by 2030. This means that there will be at least one electrical edition of all the around 300 models the group produces. This makes Volkswagen the first major player who has set a date for electrification of its entire model range
Exponential technology development
Technology development in the automotive industry is nothing new. It is first and foremost the increasing speed of development that will challenge our ability to remain a leading industry player. This is evidenced, among other things, in the fact that the life of a company is falling drastically, from 90 years in 1935 to 18 years today. The brain is programmed to believe in linear development, while the rate of development of new technology services is exponential. Therefore, we tend to overestimate the consequences of the short picture, but seriously underestimate the consequences of the long picture. The name strategy behind the Møller Mobility Group is rooted in the strategy that in the future we must be an offensive service provider of smart mobility solutions as well as physical products. At the same time, the change of name emphasizes the need for a necessary change of pace and will hopefully help to provide energy for the restructuring work we face. Future competitors are not the ones we know today, they are unknown.
"It is first and foremost when we see the interaction between technology and business models we see the basis for a transport revolution"