February 05, 2019

Purpose as the magic key to future mobility

Here’s a riddle for you: What vrooms across streets, featuring four shiny metal rings, four wheels, a high-tech dashboard above the steering wheel, and a sleek exterior?

You guessed right – it’s an Audi. The company delivered 1.81 million such vehicles worldwide last year. But don’t be fooled. If you ask the German carmaker, Audi isn’t producing cars anymore. Nowadays, they’re producing „breathing rooms/greater freedom“.

In a new commercial Audi emotionally claims: „Der Drang nach Freiheit liegt in unseren Genen. Deshalb bauen wir keine Autos. Wir bauen Freiräume!
(„The urge for freedom lies in our genes. That’s why we don’t build cars. We build greater freedom/breathing rooms.„)

Today, cars are no longer just cars. Products are never merely products. They have to have a purpose.

Forward-thinking marketers align the product with its purpose. Cars are turning into living rooms on wheels. At the core of Audi’s vision of future mobility lies the customer’s freedom, enabled through digitalization and Artificial Intelligence.

Car trade is changing fundamentally. The Global Automotive Executive Survey by KPMG showed that 59 percent of execs believe that connectivity and digitalization is the number one key trend in the industry. By 2025 the number of classic car dealerships could be reduced by half. Meanwhile, KPMG also revealed that three out of four of around 1,000 car managers worldwide believe that a car connected to its environment, which feeds and collects data, will generate ten times more sales in its life span than a conventional car of today.

Hence the key question for CEOs and their CMOs is:
What does your company stand for? What image are you portraying?

Companies around the globe have realized the value of defining their purpose. The ambitious Chinese electric vehicle maker NIO is busy developing the connected and smart autonomous car of tomorrow. „The automotive industry is on the cusp of profound change,“ the startup states. „In the future, cars will go one step further and free people from driving, giving them the freedom of time. It’s a future we’re excited to shape.

NIO, which is partly based in Munich, made its Wall Street debut last September. Within six months, it produced 10,000 of its first car, the ES8 7-seater electric SUV in China. And NIO isn’t just a car company, it’s also a lifestyle brand. At its dealerships, called Nio Houses, customers can socialize and work at ‚trendy club‘ style spaces featuring labs, lounges, kitchens, libraries, meeting rooms and playrooms for children.

BlackRock’s Larry Fink is convinced that setting a clear purpose will drive long-term profitability. The CEO of the world’s largest asset manager thinks defining a company’s purpose is key, especially in a fragile global landscape. „Purpose is not a mere tagline or marketing campaign; it is a company’s fundamental reason for being – what it does every day to create value for its stakeholders,he said in his annual letter to CEOs.

Profits are in no way inconsistent with purpose – in fact, profits and purpose are inextricably linked.

When millennial workers were asked as part of a recent survey by Deloitte what the primary purpose of businesses should be, 63 percent more of them actually said “improving society” than “generating profit.”
Daniel Kahneman, winner of the Nobel Prize in Economics, has proven that purchasing decisions are usually made emotionally and therefore, a clearly defined higher corporate purpose plays a decisive role because it explains what a company stands for and thus creates emotional context.

Car companies are adopting positive messages that speak to customers‘ values. Take NIO for example. Its Chinese name „Weilai“ translates as “blue sky coming”. China’s Tesla wants to lessen air pollution through its EVs. Jack Cheng, one of the co-founders, said recently: „At NIO, we’ve set a vision that we can clean up the air.

Meanwhile Europe’s biggest carmaker Volkswagen is reshaping its brand. For the I.D. line, VW designers are focusing on large interiors where passengers can relax in lounge chairs, and autonomous technology. New functions such as speech, gestures or augmented reality with HoloLens glasses will make it as easy as possible to control content.

To keep up with the competition, new partnerships even between rivals are emerging. The German carmakers Daimler and BMW are considering combining forces for autonomous driving. With this cooperation, the two car manufacturers want to reduce the billions in development costs for the technology. BMW already joined forces with Intel and the Israeli sensor specialist Mobileye. And Volkswagen and the #2 in the US, Ford, have announced their global partnership in January.

The race is on.

» view LinkedIn article

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