Now it’s just a matter of time until we’ll be travelling around in true auto-mobiles, cars that are capable of moving around themselves – not only without horses but also without the active driver. Autonomous driving is here to stay. Many cities and countries around the world are experimenting with new systems, there are test sites everywhere. Personal transportation is taking off in several directions relating to refraining from ownership – the car sharing approach (e.g Zipcar, SunFleet), the TNC approach (e.g. Uber, Lyft) or just a shift to substitute transportation means (trains, trams, bikes etc). Add to this the maturing technologies for autonomous drive, and it is easy to conclude that a lot is going to happen, and that margins and added value will be shifted around significantly in comparison with today’s situation. For instance, Uber’s profit formula is, obviously, much more appealing to them if they can take the driver out of the equation all together.
”Autonomous driving is here to stay.”
Atypical players enter the market (e.g. Google, bunches of software companies), all the while incumbent automakers try to get and maintain momentum – such as Mercedes-Benz, Audi, Toyota, Tesla (who for once actually has to be considered an incumbent) – and our proud Swedish flagship Volvo! A testament to Volvo’s position was the recent deal with Uber, to provide 100 vehicles for testing in Pittsburgh – and the joint commitment between the two to invest $300 million in the development of an autonomous car ready for the roads in 2021. And in this volatile and dynamic context, perhaps one or two might wonder, how come Volvo managed to get such a prominent position. Unlike their old rival Saab (a keen inventor of a range of features, including front wheel drive, transverse engines, turbo fit to car, and so on), Volvo are not necessarily known to be extremely innovative.
But looking closer at it, the fact that Volvo is a leader in autonomous drive is not strange at all. Volvo has been strong and innovative, market leader really, when it comes to safety, since the 1940’s. Volvo came up with the so-called “safety cage” in 1944, a robust chassis that could take a crash. They came up with the laminated windshield, the three-point seatbelt, and a million other car features that help you survive a crash. In the 60s, Volvo also surveyed and built up a database of car crashes and their consequences, long before anyone else, through their Accident Research Team. And although Volvo, for a long time, faced competition from manufacturers who focused more on electronic safety (sensors, automatic brakes etc, things that help you avoid a crash), they actively addressed and closed that gap during the 00s, while maintaining their edge on mechanical safety – albeit probably not because they foresaw a driverless world. Some of us probably thought that safety had become obsolete as a USP, but it is easily the primary concern, along with control, in the new landscape of personal transport. While this is evidence of the importance of balancing your capabilities with the environment and avoiding excessive or insufficient investment in path dependent assets, it is also evidence of an evolutionary perspective, that it is the world out there that determines who is fittest at any point in time – and why.