During the past decade, the automotive industry emerged from one of the most challenging periods we have ever encountered, and has now entered one of the most exciting and promising times in our history. Yet, even more important is our focus on the future, which will be defined by an important trend: the automobile as part of a larger ecosystem.
This requires a change in our view of the car as an individual object to seeing it as part of our broader transportation network. It also requires a fundamental change in how we think about transportation. Customers today have extremely diverse priorities, and we must embrace these differences as we design and sell automobiles.
The facts that underpin this trend are compelling. With a growing global population and greater prosperity, the number of vehicles on the road could exceed two billion by midcentury. Combine this with a continuing population shift toward cities, with a projected 54% of the global population in cities by 2050, and it becomes clear that our current transportation model is not sustainable. Our infrastructure cannot support such a large volume of vehicles without creating massive congestion that would have serious consequences for our environment, health, economic progress and quality of life.
Challenge—and Opportunity
The good news is that this scenario is not inevitable, and some experts say this challenge represents a $130 billion business opportunity for the automotive market. Some solutions already are under way to develop more space-efficient vehicles with clean engines that run on gas or alternative energy sources. Yet other answers will require a fundamental rethinking of what the business of being an auto manufacturer looks like. No matter how clean and efficient vehicles are, we simply cannot depend on selling more of them as they function today. Cars will need to be smarter and more integrated into the overall transportation system.
Forward-looking companies will redefine themselves and move from being just car and truck manufacturers to become personal-mobility companies. We will be thinking more intelligently about how the vehicles we build interact with one another and with a city’s infrastructure, which includes trains, pedestrian walkways, buses, bikes and everything else that helps us move through urban centers.
Rapidly changing preferences among car owners, including an ever-increasing emphasis on connectivity, will redefine the types of vehicles we bring to market, the features we focus on and how vehicles are marketed and used.
New Ownership Models
The rise of companies such as Lyft, Uber and Zipcar underlines individual ownership as not always being the most cost-effective way to obtain access to a vehicle, especially for urban customers. Individual ownership also may not be the primary model of vehicle ownership in the future. Just how this affects the current sales model is yet to be seen.
Cars of the future will be mobile communications platforms that talk to each other and the world around them to make driving safer and more efficient. They will be integrated into the transportation ecosystem in ways that optimize the entire system, with software that allows owners to increasingly customize features and functions. We already are in the early stages of this transformation, with wireless communication, infotainment systems and limited functions for automated driving and parking.
Continuing to meet consumer demand for greater efficiency also will require more than just changes to engines and energy sources. New materials and manufacturing processes will reshape auto manufacturers and the suppliers we have worked with for decades.
Aluminum and high-strength steel will evolve as the materials that serve as the backbone of the industry. Carbon fiber will move from the realm of race cars and million-dollar exotics into small cars and crossovers. This will require rethinking the life-cycle supply chain.
Redefining Driving
We also will need to rethink what defines the act of driving. Autonomous driving, or cars that navigate themselves, will be possible, and in certain situations, common practice. We already are seeing some of this make its way into vehicles to provide safer and easier driving. As these technologies develop, we expect they significantly will extend the useful driving life of individuals and offer new opportunities for the physically challenged. Some entrepreneurs are even pushing current boundaries further by exploring the feasibility of flying cars. While these would require significant regulatory development to become a viable option, they do provide a glimpse of what our future of mobility may look like.
All of this serves as the backdrop to how we think about Ford Motor Co. today. Henry Ford redefined mobility for average people, and we have the opportunity to do the same now. The next 20 years will see a radical transformation of our industry, and will present many new ways of ensuring that my great-grandfather’s dream of opening the highways for all mankind will remain alive and well in the 21st century and beyond.