The future of mobility.
TORSTEN FRECH, WHAT WILL THE WORLD IN WHICH DAIMLER OPERATES LOOK LIKE IN 2025?
Well, first of all, the world economy will continue to grow. Global economic output will increase by more than one third over the next ten years, and half of this growth will come from Asia alone. The United States and China will then be by far the largest economies in the world. At the same time, the global population will grow by more than 800 million people over this period – largely driven by substantial increases in Africa and on the Indian subcontinent.
WILL DEMAND FOR CARS NOT PEAK AT SOME POINT?
We don’t believe it will. We can certainly see signs of saturation in the advanced economies. But many emerging markets in particular continue to reveal considerable pent-up demand for personal mobility. Demand for cars in these countries will grow on the back of rising per-capita incomes and a steadily increasing middle class. In China, for example, the passenger-car market is set to grow from just under 20 million units at present to almost 30 million. This would constitute an increase equal to three times the entire German auto market. We should see above-average growth in the premium segment in China and even worldwide.
A SIGNIFICANT PROPORTION OF THE POPULATION GROWTH THAT YOU MENTION WILL TAKE PLACE IN CITIES. WHAT WILL THE ADVANCE OF URBANISATION MEAN IN TERMS OF DEMAND FOR CARS?
The world’s mega-cities make a substantial contribution to global economic growth. By 2030, for example, the economic output of the area in and around Tokyo will be roughly equal to the current size of Brazil’s entire national economy. This growth will, of course, generate demand for cars. However, the amount of space available in these urban centres is limited. We are already seeing that more and more cities are introducing measures to restrict the numbers of cars on their streets. This ambivalent environment in the major conurbations means that we need to find solutions to cope with this mega-trend. This means, first and foremost, that our vehicles will become more ‘urban’ while innovative mobility solutions become increasingly important.
Torsten Frech, Deputy Chief Economist
HARALD RUDOLPH, YOUR WORK DEALS WITH THE FUTURE OF MOBILITY. WHAT FURTHER CHANGES DO YOU EXPECT TO SEE?
The proportion of electrified vehicles on the roads will rise sharply in response to increasingly stringent legislation in all key regions. Over the next ten years, therefore, we expect to see the industry deliver further improvements in battery technology as well as full connectivity in all new vehicles and for driverless cars to be ready to be launched in the market. The offering available to customers will generally become even more diverse and, in addition to vehicles, will include intermodal mobility similar to what we already provide with moovel. We are competing here not only against other automotive manufacturers but also against companies that come from sectors such as information technology.
DO YOU ALREADY KNOW TODAY WHAT SORT OF CUSTOMERS WILL BE BUYING OUR CARS IN TEN YEARS’ TIME AND WHAT THEY WILL BE EXPECTING OF US?
The average age of our customers will have fallen by 2025 and the proportion of women will increase. Our customers will increasingly come from Asia, be very well informed and, of course, discuss our products on social media. Mobility requirements will then vary widely and we will reflect this diversity in our product ranges, which will comprise not only vehicles themselves but also supplementary financial services, the ability to use vehicles on an occasional basis only – for example at weekends or for special occasions – and the availability of intermodal mobility over and above the conventional car.
HOW DO CUSTOMERS DIFFER FROM ONE REGION OF THE WORLD TO ANOTHER?
Leaving aside requirements arising from legislation, climatic conditions and infrastructure, the demands of customers themselves do not really vary that much. They have similar preferences in terms of design and usability, although there are certain priorities in individual markets which we factor into our product ranges. In addition to the considerable importance that the Chinese attach to connectivity, for example – fittingly for a country that is the world’s largest online market – customers there place great value on having a sizeable and comfortable rear passenger compartment. In China, therefore, we offer specially equipped vehicles with an extended wheelbase.
Harald Rudolph, Head of Daimler Strategy
WHAT EXACTLY DOES THIS MEAN FOR OUR VEHICLES IN FUTURE? HOW WILL THEY CHANGE?
Many characteristics of the F 015 research car that we exhibited at the Consumer Electronics Show in Las Vegas at the beginning of 2015 are excellent examples of what we think vehicles will look like in future: featuring new, cutting-edge design and emissions-free, driverless technology, and equipped with intuitively usable connectivity that enables customers to come into full contact with their surroundings. In short, vehicles are increasingly assuming the importance of a third living space that is becoming established alongside the world of work and the private sphere. This mobile environment enables us to create additional scope for making valuable and productive use of the time that we spend in our vehicles. In future this will form an integral part of our idea of luxury.
' We have to base our digitised processes around our customers. '
AND WILL OUR CUSTOMERS BE DRIVING MORE ELECTRIC VEHICLES THEN?
Yes, the proportion of fully or partially electric vehicles will increase, particularly after 2020. This is especially true of China and the United States. Our production drive for plug-in hybrids – of which there will be ten new models by 2017 – will enable us to hugely expand our range of electrified vehicles. And we will also be broadening our offering of totally electric vehicles.
IS IT THEREFORE TRUE TO SAY THAT EVERY NEW MERCEDES-BENZ MODEL THROWS UP NEW TECHNOLOGIES?
If we are to secure our pioneering position in areas such as connectivity, we have to regularly update our digital technology during our product cycles as well. As far as connectivity is concerned, we can no longer think in development cycles of several years; instead we have to replicate the fast pace of the consumer electronics industry.
WILL THIS FASTER PACE MERELY ALTER THE WAY IN WHICH VEHICLES ARE DEVELOPED?
No, the digital economy will transform our entire value chain. We have to base our digitised processes around our customers and offer them the sort of experience that they are often already familiar with from the consumer electronics sector. This includes things such as offering them a personalised and customised service and providing them with information on the progress of production. This is the new kind of quality that we will be integrating into our processes.
WILL THIS CHANGE THE WAY IN WHICH CARS ARE MANUFACTURED?
The way in which we work will change in order to meet our customers’ new requirements. This will include an even greater emphasis on cross-functional working, and restructuring our processes to make them more agile. The digitisation of the entire value chain will only work if the individuals involved think in terms of processes rather than in functions.
DOES THE CONCEPT OF CUSTOMISATION NOT FLY IN THE FACE OF THE GROWING IMPORTANCE OF THE SHARING ECONOMY, WHICH ENCOURAGES THE SHARED USE OF THINGS SUCH AS CARS AS PART OF A COLLECTIVE MOBILITY SOLUTION?
We need to differentiate here. The sharing economy will, of course, continue to grow rapidly over the next decade across all markets and demographic groups. This is why we are further expanding offerings such as car2go and moovel. New sharing concepts would also be conceivable. However, it goes without saying that the individually manufactured car as we know it today will still be around in ten years’ time and will remain in demand. This is particularly true of vehicles of such an emotionally charged brand as Mercedes-Benz.