The Trends in Mobility’s New Business Models. A Case Study Applied to Automobile Manufacturers.

Keywords:

Abstract:

Purpose:
The mobility sector is experiencing significant transformations. The emergence of digitization and new technologies related to electric vehicles (EVs), connected and autonomous vehicles (CAVs), and shared vehicles have caused changes in the value chain of the automotive industry and have also raised a range of issues for OEMs to address, including digital platforms, connectivity, and sustainability. Up recently, the mobility value chains were highly hierarchical, but with the entry of new technological players, this dynamic seems to be shifting. As companies deal with the uncertainty and rapid advancements in this field, they are seeking fresh value propositions and business models. In this context, the automotive industry is also exploring novel solutions such as mobility as a service. For this reason, the Global Value Chain approach let understand how car manufacturers are implementing new business models associated with autonomous, electric, connected, and shared vehicles.

Design:
In order to understand how automobile manufacturers are implementing the new business models associated with mobility as a service, it was applied a qualitative methodology based on multiple case studies. Thus, four leading OEMs in technology and innovation (Volkswagen, Stellantis, Toyota and Honda) have been selected. The case study provides a simpler and more detailed way to analyze a large amount of information, offering greater flexibility and the potential to draw precise conclusions. In situations where direct interviews or focus groups are not feasible due to the scope of the business group and various departments involved, secondary sources of information can be used to obtain specific details. In this case, an exhaustive review of over 300 documents was conducted through content analysis reviewing keywords and manufacturer names to gather information, and the most relevant documents were selected for an in-depth analysis. This technique is well-suited for text analysis and for interpreting the information, establish connections, and make comparisons. Finally, the information was structured into five blocks of different business models: Services associated with the type of vehicle (EVs and CAVs), digital platforms, services associated with connectivity, car-sharing, and complementary services.

Findings:
The findings suggest a profound shift in the mobility-as-a-service paradigm, value chain relationships, and business models. This shift is attributable not only to digitization but also to the reliance on an interconnected market that revolves around gathering and managing data to provide customized high-value services. Furthermore, the impact of digitization on business models varies depending on the actor and value chain. At present, EV-related services are focused on monitoring the electric battery's charge status and locating charging points. All OEMs are addressing servitization through CAVs, but this is still in the very early stages and is contingent upon the technological advancement of other actors. Additionally, all OEMs have integrated data exchange business models and have established digital platforms (either owned or outsourced) to provide a marketplace for services. Additionally, services directly linked to connectivity, such as software or content updates, are offered. Thus, the companies that acquire, manage, and exchange data have the power to develop and modify different business models. While the share-economy has had a significant impact, OEMs have yet to successfully implement a car-sharing service. They have attempted to capture a market share, but strong competition and a delayed entry into the market have hampered their success. Finally, the research highlights a paradigm shift in the value chain from a product-oriented focus to a service-oriented focus. While companies strive to maintain control over high-value activities, this is not always feasible. The study emphasizes the dependence on technology partners, a circumstance that reduce the power of OEM within the global value chain.

Practical and theoretical implications:
Regarding the theoretical contribution, our research suggests that the mobility value chain is focused on services and not on the product. In addition, the power of the actors depends on the control of activities that provide high added value for customers. Thus, companies seek to obtain, process and generate information, to develop business models related to mobility as a service. Regarding the relationships in the value chain, it is possible to observe a change to the traditional buyer-seller. Currently, to implement new business models, it is necessary to collaborate with technological partners, such as car-sharing or autonomous driving. Being these suppliers in many cases competitors. Therefore, the new relationships are complex and imply a distribution of power that did not exist before. Regarding the practical implications, OEMs seek leadership by offering all the business services analyzed and, although they have been focused, none are really renounced. Thus, the results of the investigation reveal the business models that the OEMs are betting on. Given the large number of resources and investments required for its implementation and its unfeasibility in the medium term, OEMs should focus mainly on connectivity services and digital platforms, while other models such as car-sharing should move to a background. Regarding the business models related to EVs and CAVs, there is greater uncertainty, and they need a long-term analysis.