CEO Confidential

Business mobility through the ages

Ever since the post-war era, the car has become a key factor in economic growth and prosperity in Europe and elsewhere. With their flexibility, speed and ability to carry material, cars also boosted the daily work of enterprises and allowed small businesses to start up and grow. Their ready availability also fostered the rise of suburbs in the periphery of big cities, where families could settle away from the crowds.

Needless to say, cars have evolved significantly since those days. Outer design has changed with evolving taste, fashions, and engineering needs. They have been made safer and more comfortable, and engines have become more efficient and cleaner to meet stricter environmental requirements. The electric drivetrain, once upon a time a mere vision, has been conquering the world of mobility and has earned itself a place in the future of driving.

Increasing environmental awareness

A vital factor has been the growing environmental awareness of consumers and the industry. The humans’ carbon footprint has increased sharply since the 60s, and the internal combustion engine is partly responsible, of course. Research shows that road transport accounts for 20% of the CO2 emissions in the EU, of which 12.5% are attributed to cars and vans. In 2009, the European Union began setting ceilings for emissions, that is 130 g/km for new passenger cars. Limits for light commercial vehicles (LCVs) followed in 2011. The next target, 95 g/km of CO2 for new cars, has already been set for 2020.

Other regulations have been appearing at local level. Some cities are restricting the use of petrol or diesel vehicles in the centre of town. In Milan, Italy, charging combustion vehicles must pay a fee to enter the historic city centre. In Germany, if you wish to drive to the centre of, say, Munich, you will need a special sticker indicating that you have a certified low-particle engine.

For the automobile industry, the new regulations have been met by innovative engineering solutions. Increasingly, cars are being produced using state-of-the-art lightweight materials, like carbon composites or aluminium, which is one way to reduce fuel consumption. The introduction of electronics has allowed for engine optimisation as well. Focus on electric drivetrains in the past decade has also changed the make-up of the automobile world and fleets in particular.

Indeed, electric light commercial vehicles (eLCVs) are proving ideal in urban situations and are becoming more and more important for businesses: They are quiet and non-polluting. The development of electric vehicles is accompanied by a growing network of charging stations, which can be located using apps and a smartphone or an on-board computer. 

The new paradigm

Parallel to the technological transformation of the automobile, a long societal process has also been in motion, one that represents a genuine paradigm shift. Years ago, individual ownership of the car represented success and “having made it”. So cars became larger, more powerful, more comfortable and more luxurious, with lots of extras. The result, however, was more congestion in cities, more pollution and more noise. This, in turn, tipped the scales in the favour of more fuel-efficient vehicles, public transportation, or even bicycles. New ideas for innovative flexible mobility forms began to emerge, notably carsharing.

Carsharing has grown into a solution that gives people a wide range of choices. It includes all types of transportation and still offers comfort, convenience and ecological sustainability. In addition, carsharing offers quite a few financial rewards, since you are no longer paying for a car that stands around. Users can decide what kind of car they need for a specific journey – visit to a client, a trade fair, weekend in the country, grocery shopping – or whether it is more effective to use the train or bus. Even air travel can be included in the mix, especially since growing competition among airlines has led to a lowering of ticket prices.

In this context the role of leasing companies will transition to providers of advanced mobility solutions. Fleets, in particular, can become leaders in shaping how people and companies use mobility and what cars they use. A fleet is an ideal place to introduce state-of-the-art, ecologically friendly vehicles, like the BMW i3, Renault ZOE or Hyundai Ioniq Electric.

The next stage

One of the main topics being discussed when it comes to the future of the automobile is the self-driving car. As the technology gets perfected, it will have a major impact on how fleets are designed. Imagine, people will be able to use their travel time to get work done, make phone calls, write up reports, or plan strategy. The time gained can then be used by the company for motivation incentives, such as giving extra free time, or even access to a travel budget for private purposes.

Self-driving cars have several other advantages: They will be safe and produce fewer accidents. Better, yet, instead of waiting around for an employee to finish up a business meeting, the car can autonomously take care of other rides or business, like pick someone up at the airport. Meanwhile, another car can be sent for the employee at the meeting. This will significantly increase a car’s utilisation rate in the fleet, which is currently at a rather low 4%. The result might be cost savings by a reduction of the fleet’s size.

The future scenario

A few decades ago, this would all have sounded like some fun science-fiction movie. Even back then, engineers dreamt of making cars safer and more efficient using new technologies. In the years following, carmakers began rethinking the automobile and the mobility model. How could emerging technologies be integrated for the benefit of the user? One of the most logical and intelligent outcome is the connected, autonomous vehicle, that will give passengers comfort and convenience, while generating new sources of income for the manufacturers.

The future of the connected, autonomous, low-emission cars is assured, in particular for cities. Several companies have already expressed interest in implementing the technology. As we know from experience, that once it begins to be adopted and is demonstrated to be effective, it will be implemented elsewhere and then further developed. As mentioned above, though, the fleet is one of the neural points where advanced mobility concepts can be applied first and then developed. It is not only an opportunity for the established car brands, but also for young, innovative business, who can jump on board with fresh ideas and technologies. The future is already within our grasp.

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