Radical new changes in the industry are directing the proceedings of IAA Frankfurt 2019. Concerns surrounding climate change, sustainable mobility, and rapidly shifting sales numbers globally are the factors steering the automotive towards a newer era.
In such a situation, global manufacturers came up with their unique way of tackling the change at Frankfurt together. Electric cars, new partnerships, new transportation policies are some of the prominent trends visible at the auto show.
IAA Frankfurt 2019 was witness to Volkswagen's first ever mass produced EV, the ID.3.
Are people going to buy EVs?
We are on the cusp of a major transport turnaround that will suddenly fill the market with electric vehicles in all shapes, sizes, and budgets. From a Honda E to a Rimac Concept Two, electric cars are going to be present in every imaginable segment. The pertinent question here is, are people going to buy electric cars?
The major motivation behind commencing electric car production is a global tide of tightening emission norms forcing manufacturers to create overly complicated IC engine-powered cars lately. While Europe is making efforts to meet its targets of the 2015 Paris climate accord, China (the world’s largest automotive market) is taking initiative for more low-emission vehicles.
However, making such a huge change in the industry is influenced more by whether consumers will want to buy electric vehicles or not. EV made up 1.8 percent of the European market through the first six months of the year, according to data from JATO Dynamics. EVs have more sales as luxury cars, with Tesla being an example.
The argument for flooding the market with so many electric vehicles is that consumers need to see enough to choose from. Only then is it possible to have consumers shift their buying habits to include cars driven by alternate propulsion.
Electric vehicles today are seen as more of statements of wealth and eco-consciousness or performance. Which is why there are more takers for the Taycan than the fantastic Honda E.
World sales of cars are projected to shrink to 78.3 million this year, from 83.0 million in 2018. The US-China trade conflict, Brexit, and various other factors have upset automotive retail and supply chains all over the world.
Rising costs of purchase, ownership and insurance are pushing people to prefer shared, on-demand mobility. The automotive industry finds itself in an interesting situation where it can achieve sales majorly for fleet operations compared to private owners. Naturally, the nature of sales will not demand constant and substantial updates to cars apart from perhaps onboard communications. This might lead to the automotive industry’s growth curve fall flat.
It is a well-known fact that the industry thrives on profits. The ability to eke out the maximum profit is what directs project briefs across all automakers. Companies no longer seek to maintain a presence at auto shows around the world, citing the poor returns against the logistics and costs of setting up a display in such events. Carmakers strive to know their exact target audience and go after them through specialised, exclusive events.
2019 IAA Frankfurt saw the number of exhibitors drop to 800 from 994 in 2017. Some 30 major carmakers have chosen not to visit one of the most influential events on the automotive calendar. These include names like Toyota, Aston Martin, Nissan, Jeep, Fiat, Peugeot, and Alfa Romeo.
Until electric cars are seen as a viable means of transportation, manufacturers will have a hard time selling them. The joint move to introduce a multitude of EVs simultaneously to market is aimed at giving the consumer a wide variety of choices. This is expected to stimulate the shift towards sustainable mobility.
Even a brand like Lamborghini is treading into electrification to explore how it can push a car's performance envelope.
Protests and dialogue
Environmental groups like Greenpeace and Friends of the Earth Germany, and Germany ADFC bicycle club are organising a march to the exhibition venue on Saturday to call for more environmentally-friendly transportation policies. They are aiming to push the industry to make more use of renewable energy instead of fossil fuels. On their agenda is also the topic of making urban roads more bicycle and pedestrian friendly.
The German Association of the Automotive Industry is organising a civic dialogue on 13th September, inviting up to 200 citizens to interact with industry figures like Daimler CEO Ola Kallenius, Porsche CEO Oliver Blume, and head of the IAA, Bernhard Mattes.
All said and done, the automotive industry is close to a paradigm shift caused by various disruptions in trade and technology around the world. Automakers are finding newer ways of engaging with their target demographic and landing sales. Major rivals are coming together to work on exciting new projects. All the efforts are towards speeding up the transition to sustainable mobility. How much time will that take? Well, that depends on when the government, law, automakers, and consumers are all aligned with a common vision of sustainability.