Future Individual Mobility – Consequences for the Tire Industry

In his keynote address to the recent Future Tire Conference 2016, Christian Kötz, president of the European Tyre and Rubber Manufacturers’ Association, provided some thought-provoking views on the future of individual mobility – and its consequences for the tire industry:

Essen, Germany – Our industry is used to evolutionary change but I believe we are now facing much more revolutionary changes.

Carbon-emission-reduction targets will drive the need for completely new transport and mobility solutions, including new mobility services and public transport solutions.

Autonomous driving will become a reality, at least on highways and major roads. Technically it is already a near-possibility and it is [now] a question of [resolving] issues such as insurance and liability.

Already the cars we drive have many automated features. In future, there will be connected integrated driving, which will enable completely new forms of transport and also services for the car.

Vehicles will be connected to the internet and the Cloud, enabling completely new service solutions using information from car to Cloud and Cloud to car.

Google and Uber are already developing specific types of autonomous car designs to meet [these] specific needs.

These changes will impact our industry from both a manufacturing and sales perspectives. The question is how?

Individual mobility will look very different in cities such as Istanbul, London and New York, compared to sparsely populated areas such as In northern Norway.

At the end of the day, we need to have solutions for all of these situations.

One scenario would see individual mobility provided by what we call ‘yellow boxes’ – fully automated vehicles on the roads, which will be collectively used.

Most probably, people will not own the ‘yellow boxes’: they will be available at certain pickup points. They will be able to connect to the car with their smartphone with the system identifying, for example, driving style and interior preference. You just enter where you want to go and start the car …

This will drive standardisation of vehicles, so that complexity would decrease on these high-technology-loaded vehicles.

For us in the tire industry, this might not be such a nice scenario. But this is a likely reality in the not-too-distant future and raises some questions:

–          Does the tire brand still matter?

–          Who owns these ‘yellow boxes’: are the individual customers the owners of these solutions?

–          Do they buy because of emotion and ties to brands, or is total cost of ownership the only decision factor?

–          Will it be enough to sell a tire or will the industry need to support and supply much more?

–          Would safety be much less of a concern so that total cost-of-ownership would be a much bigger factor?

So the future of our industry would look very different and there are lots of challenges in front of us.

More complexity

Overall, these and other future scenarios [will impact] product complexity. You will have more and more dedicated specific devices for specific needs, for example country roads versus city car/public transport systems. So complexity of technology solutions will probably increase.

If the tire connects to the car, the car to the Cloud, the total system can make data available to everyone. The system will be able to send out information and data-transparency will become much more important.

The tires fitted onto the automated vehicles will become more and more standardised. There will be a requisite, to a certain extent, to make all these solutions talk to each other to ensure automated driving.

So lots of things will change and some in a more dramatic way than others.

Over the past few decades, the tire industry has made a significant contribution to making individual mobility safer and more sustainable.

This type of innovation will take tire engineering to a different level and performance will be a major factor.

I do not think that the tire [will become] a commodity product. We will continue to improve our products without running into a type of maturity.

We will see more dedicated products for more dedicated solutions. So complexity will continue to increase.

Realising all of this in a sustainable way will become increasingly important.

Recycling, sustainability requirements on production processes will continue to increase. But that is something we are all used to.

What is new is that the tire, at the end of the day, is the only connection between the car and the road. So if the tire becomes a sensor for the car linked to the internet, you can imagine how much potential there will be to make mobility safer and more sustainable.

For example, if we would know what the road conditions are, the temperature, the condition of road surfaces, we can communicate them to the next cars following.

New Opportunities

There are tonnes of opportunities from a safety and sustainability point of view.

So the tire will be more and more connected.

The dream of a global tire that can be sold all over the world will most probably not be the case.

We will have west European tires, east European tires, Middle East tires, African tires; tires for automated vehicles, electric vehicles etc.

The increasing importance of online channels is because of information availability, but also through increasing service requirements. We believe we will have more and more education at the point-of-sale and point-of-service.

But will these two points be at the same location in the future?

In the scenario of a ‘mega car city’, we will have service stations but probably the purchasing decision will not be done at the service station. This will drive some significant changes to the service depot.

The importance of fleets will increase. These fleets will be looking at total cost of ownership and this combined with the data from tire to car connectivity, for example on fuel economy, as we already see on the truck side, will spill over into PCR as well.

Total cost of ownership will become a much more decisive factor, particularly as these types of service providers will look not only for products they will look for a service solution as well.

Being able to provide problem-free mobility for their fleet will be decisive.

So, in essence, I believe the world is changing and maybe the changes will be more dramatic that anything we have seen in the past.

The tire will not be a commodity product, but will become an intelligent part of the overall system and offer lots of opportunities for us as an industry.