To the Point: Key Takeaways from the AIA’s Automotive Conference for Executives

by | May 1, 2018 | 0 comments

What’s in the future for the Canadian automotive industry? Will the widespread adoption of electric and autonomous vehicles, ride-sharing and new forms of power generation mean the death of the private internal-combustion automobile? Or will it mean a wealth of new opportunities we haven’t even thought of yet.

The Automotive Industries Association’s latest Automotive Conference for Executives, held April 25-26 at the Sheraton Centre in Toronto, sought to provide answers to these and other pressing questions facing the industry as we drive into the future. The conference roster of professional futurists, business experts and industry insiders provided a wealth of fascinating – and in some cases, sobering – insights into what’s coming down the road, and what we can do to meet it.

Here’s are the key takeaways:

Opening Keynote Speaker: Nikolas Badminton, futurist: “The Future of the Automotive Industry 2018-2030”

  • Change is going to happen: if we don’t change, it will change without us
  • Following the success of the Tesla 3 Series, many major automakers are launching their own clones – Musk gave away the patents for a reason: this is disruption
  • At the same time, driving itself is changing; only 61% of young people 21-29 drive, a drop of 12.5% in last decade; so ways of reaching Millennials have to change radically – Ford using Instagram to promote electric technology, marketers partnering with film companies like Disney
  • Transportation will become a service: Along with Zipcar and Car2Go, Lyft’s All Access Service for under $400 a month, offers 60 rides and unlimited mileage – about the same cost as owning a car; improving the driving experience will become a growth industry: e.g., if you take the same routes day after day, transportation can be used for other services, such as motels
  • Autonomous cars: even with recent high-profile (and vanishingly rare, statistically) deaths, can’t compare to 3,287 deaths per day with human-driven cars; by 2030, human-driven cars could be outlawed on highways; other forms of transportation (transit, trains, shipping, trucks, etc.) will routinely be autonomous
  • EVs have way fewer moving parts, so aftermarket revenue could drop by as much as 60% ($400 per car annually), so imperative to find alternatives: “Conversions” of classic cars, upgrades to conventional EVs through software downloads
  • Security will become a huge issue, since these cars are vulnerable to hacking
  • By 2025, self-driving vehicles of all kinds will be commonplace, EVs will take over in cities; by 2030, 2,000 km per charge could be common

 

Diane Francis, author, business editor (The Financial Post, National Post)

  • Toronto has gone from being a sleepy, British-style city to a U.S.-style urban metropolis in the last generation; at the same time, the U.S. (in general) has become much more liberal and Canadian-ish in lifestyle; I feel the two countries will essentially merge within a century
  • More economic integration a must for both Canada and the U.S: beyond free trade to customs unification/universal NEXUS, labour mobility, tax harmonization, common market, shared security and law enforcement, a virtually non-existing border between the two, with shared external border around us
  • Full political unification unlikely, since few Canadians want the U.S. style of government, which has clear flaws compared to Canada’s parliamentary system, but Americans have almost religious zeal towards their system, so unlikely to give it up
  • The problem with NAFTA is not Canada, it’s Mexico, for both countries – Trump is right that it needs renegotiation, but to encourage Mexico to raise wages and provide better safeguards; it’s been much worse for Canada than for the U.S.
  • Also “winter is coming” – by 2030, 40% of current jobs in both Canada and the U.S. will be eliminated due to AI, autonomous vehicles and other technologies; in almost 75% of U.S. states, driving-related jobs are the leading occupations
  • Technology is stealing not just jobs, but our life force: take Francis’s own field, publishing, where Google first stole content and gave it away for free, then stole the advertisers
  • At the same time, demographics make some form of union imperative: Canada’s population aging faster than the U.S., so we need their younger labour force and their better weather

TEDx Talks:

Paul Prochilo, CEO, Simplicity Car Care

“The Good, The Bad, and the Future”

  • Good: the aftermarket in Canada is cumulatively a $21B industry, so still healthy; new car sales continue to increase, which bodes well for the aftermarket as these cars come off warranty; average vehicle 9.6 years old
  • But driver assist and AVs will have an impact on the collision sector, since they reduce accidents; don’t foresee a drop in revenue as much as a change in the nature of repairs, towards fewer, more extensive repairs
  • Consumer behaviours changing to new ways of interacting with repairers: either don’t talk with us at all, or through technology and unrestricted by business hours
  • Government support programs exist to encourage and support young people entering the industry
  • Bad: talent development shortages and lack of a training infrastructure: also diversity problems, with only 4% of fulltime workers being female
  • Future: greater performance by independents through performance groups, similar to buying groups; reposition aftermarket as “remanufacturing,” rather than repairers; perhaps football-style recruitment to attract young people, starting in high school

 

Dave Fifield, President Wakefield Canada

“Customer-Focused Innovation”

  • Like a 1970s rec room, some of your systems may not have kept pace with changing technologies, so look to customer interactions for ways to modernize
  • After a drive-along, Fifield found that customers have no way of knowing how much oil to order for delivery, so the truck was returning to the DC still half-full. A a result, developed a special oil tank cap that measured tank contents and sent the results wirelessly, so customers could order precisely what they needed; caps were given to customers at no charge, which streamlined the entire process

 

Ray Proulx, Director of Sales KYB Americas and Chair of the Be Car Care Aware Committee

“Navigating the Changing Road”

  • Our competition is the dealer, so key is to streamline training for our distribution network in real time
  • Key is harnessing technology to help our customers, the ASPs, understand new technologies as soon as they come on-stream

 

Closing Keynote Speaker: Michael Hyatt, entrepreneur, tech visionary, Dragon’s Den personality

  • Opportunity is never granted or bestowed; it is earned
  • First Rule of Disruption: almost everyone who has made it is labelled “unlikely,” from airplanes to computers to the Internet; 90% of success is just showing up – and persistence
  • How Do We Get Better? By incremental steps, not major leaps; by listening and asking questions; trying new things and jumping, instead of holding back
  • Winners often do things that no one else agrees with at the time; think of Lee Iacocca and the mini van; he was fired, but came back and the mini van became the number one selling vehicle for decades after that
  • Attitude is all: it’s human nature to think things are getting worse, but actually the world has never been better; despite a few hot spots, there is no war anywhere in the world
  • But the next four years will see some of the most major shifts in decades: 3 billion new Internet users, which will bring about unprecedented changes; all companies will become software companies in one way or another; and the future of computing will be to exponentially increased power – as powerful as human brains, and then much more powerful
  • Four main forces to be aware of:
    • money: lots more capital will be available for innovation;
    • every home will become a power plant, due to solar technology, shared grids, etc.;
    • quantum computing will enable computers to calculate in three seconds what present day computers do in 14,000 years; this will lead to levels of AI that we haven’t even conceived of yet;
    • technologies like the gene-editing technology CRISPR already allow you to choose eye colour and sex of a child; within 100 years, we may see the emergence of a new species, Homo Technics, whereby technology is inserted in the human body to create new life forms
  • At the same time, not all good; climate change is accelerating, and fertility rates are dropping rapidly since the 1960s, possibly due to plastics pollution; these issues must be addressed for human survival.

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