Human:
– The traditional car industry has become so culturally isolated, mechanically obsessed, over-specialized, over-invested and silo’d that they are not setup to be efficient versus companies coming from the consumer electronics and in the future, software industries. The nature of the game has changed and the goalposts have been moved, and will continue to be moved faster, as software & services can evolve much faster than mechanical systems.
– The traditional car industry really focuses on the owner / driver of the car, the passengers and group experience are by far secondary. A holistic offer for all passengers and ownership models are lacking.
– Many consumers in Europe actively shun technology where the East embraces this. It’s very hard for an international car-brand to satisfy both with the same offer.
– Many car brands are unprepared for the changes that will happen in cars once we stop actively driving them. Could we see design / interior brands starting to collab with vehicle-platforms?
– Will we see a future where most Western car brands are owned or co-owned by Asia corporations?
AI:
1. Culturally Isolated, Over-Invested Legacy Automakers
The Problem:
Traditional automakers are trapped by decades of over-specialization in mechanical engineering, siloed teams (hardware vs. software), and massive sunk costs in legacy systems (factories, supply chains). This makes them slow, inflexible, and vulnerable to disruption.
Why It Matters:
- Software Gap: Companies like Tesla or Xiaomi iterate software in weeks (e.g., Autopilot updates), while legacy brands take years to redesign hardware.
- Cost Burden: Over-investment in combustion-engine platforms (e.g., VW’s €100B+ ICE backlog) limits capital for EV/software R&D.
- Cultural Inertia: Risk-averse leadership often dismisses “tech-first” approaches (e.g., Toyota’s skepticism of full electrification).
Survival Strategies:
- Spin-offs: Separate EV/software divisions (e.g., Ford Model e, Renault’s Ampere) to bypass legacy drag.
- Open Platforms: Adopt Android Automotive-like ecosystems to let third-party developers enhance features (e.g., apps for infotainment, autonomy).
- Talent Acquisition: Poach Silicon Valley engineers and UX designers to rebuild software DNA.
2. Driver-Centric Obsession vs. Passenger Neglect
The Gap:
Cars are still designed as “driver machines” (performance specs, cockpit-like dashboards), ignoring the rise of shared mobility and autonomy. Passengers get token gestures (rear-seat screens) rather than holistic experiences.
Opportunities:
- Ownership Models:
- Subscription Services: Porsche Drive, Care by Volvo, and Hyundai’s Mocean cater to urbanites who want flexibility.
- Fractional Ownership: Shared access models (e.g., 3 users splitting a premium EV) for cost-conscious buyers.
- Interior Innovation:
- Modularity: Swivel seats, foldable tables, and reconfigurable cabins (e.g., Canoo’s “lifestyle vehicle”).
- Wellness Tech: Biometric sensors (BMW), meditation-focused lighting (Cadillac Celestiq), or even in-car yoga modes.
Who Wins?: Brands that partner with lifestyle companies (e.g., IKEA x Tesla for minimalist interiors, Nike x Hyundai for athlete-focused ergonomics).
3. East vs. West Tech Divide
The Split:
- Europe: Skeptical of hyper-automation (e.g., German drivers love “control”), wary of data privacy, and nostalgic for driving “purity.”
- Asia: Embraces tech maximalism—China’s NIO offers in-car VR, AI companions, and battery-swap stations; South Korea’s Hyundai invests in metaverse-integrated cars.
Solutions:
- Regional Platforms: Build cars on modular architectures (e.g., Geely’s SEA platform) that allow “plug-and-play” tech:
- Europe: Focus on tactile controls, driver engagement, and sustainability storytelling.
- Asia: Prioritize seamless connectivity (5G, super-app integration), AI assistants, and flashy autonomy demos.
- Separate Branding: Spin off sub-brands (e.g., Toyota’s Lexus for luxury, BYD’s Yangwang for tech-forward EVs) to avoid diluting global identities.
4. Autonomous Future & Design Collaborations
The Blind Spot:
Most brands still design cars for drivers, even as Level 4 autonomy looms. When steering wheels disappear, interiors become experiential spaces—a battleground for lifestyle brands.
Likely Collaborations:
- Furniture Brands: Herman Miller or MUJI designing ergonomic, minimalist cabins.
- Tech/Entertainment: Apple (AR interfaces), Sony (in-car PlayStation VR), or Netflix (immersive streaming pods).
- Hospitality: Marriott or Airbnb partnering for “hotel on wheels” concepts for long-haul autonomy.
Outcome: The car interior becomes a branded “third space,” blurring lines between transportation, living, and work.
5. Asian Takeover of Western Brands?
Why It’s Plausible:
- EV Dominance: Chinese automakers (BYD, NIO, XPeng) now lead in battery tech, software, and cost efficiency. BYD overtook Tesla in Q4 2023 as the top EV seller.
- Financial Firepower: Asian conglomerates (e.g., Geely, SAIC) have cash and ambition to acquire struggling Western brands for market access, IP, or prestige.
- Strategic Alliances: Joint ventures (e.g., Toyota + BYD, Renault + Geely) are already common. Full ownership is a logical next step.
Examples in Motion:
- Geely: Already owns Volvo, Polestar, Lotus, and stakes in Mercedes-Benz.
- SAIC: Acquired MG Rover, now uses it as a Trojan horse to sell EVs in Europe.
- BYD: Eyeing legacy brands in Europe to bypass trade barriers and gain instant credibility.
Prediction: By 2030, 2-3 major Western brands will be majority-owned by Asian corporations, mirroring Japan’s 1980s acquisition spree (e.g., Mitsubishi buying Rockefeller Center).
The Big Picture
The automotive industry is undergoing a triple disruption:
- Tech Shift: From hardware to software.
- Cultural Shift: From ownership to access, driver to passenger.
- Geopolitical Shift: From West-dominated to Asia-centric innovation.
Winners:
- Legacy automakers that act ruthlessly: Shed ICE assets, adopt Silicon Valley speed, and partner boldly.
- Asian disruptors: Leverage cost, tech, and state support to go global.
- Tech giants: Apple, Xiaomi, and Huawei redefine cars as “smart devices.”
Losers:
- Brands clinging to mechanical heritage, regional biases, or siloed cultures.
What’s your take? Could we see a future where BMW is owned by BYD?
Audio discussion on the topic: