Hyundai Looks at Future in Mobility

How automakers are planning future mobility, explored by Robert Gray.

Mobility’s future is now. Automakers are no longer talking about the long road into the future for mobility plans, they are rolling out initiatives and enacting them today.

It seems like there’s a new mobility headline daily involving a different carmaker: Ford is spinning off its autonomous vehicle operations into a new company called Ford Autonomous Vehicles. The automaker has earmarked $4Bn for autonomous technology through 2023 and plans to launch its first self-driving commercial vehicle by 2021. General Motors is launching a peer-to-peer rental program, PeerCars, allowing GM owners to rent their own vehicles to other people through the automaker’s car-sharing platform. Volvo has launched a standalone mobility brand, dubbed “M”, to serve as the brand’s mobility solutions hub from car sharing to ride sharing and e-bikes. The automaker says that instead of car owners it wants to establish five million “customer relationships by 2025” through this new M brand.

You get the idea and as more people flock to cities and congestion continues to worsen, the appeal of alternative mobility solutions is expected to rise while the popularity of traditional car ownership will fall. Hyundai Motor America, like many of its rivals, is taking a multi-pronged approach to its mobility strategy. Company officials point to the 2018 model year as the first time the entire Hyundai lineup is connected with a telematics unit and it has announced several partnerships this year as it moves towards fully autonomous vehicles. The automaker’s Daniel Han, manager, advanced product strategy, exclusively discussed the automaker’s plans with TU-Automotive.

Q: What’s Hyundai’s approach to the evolution of mobility?

“In terms of evolving it’s about different choices being offered to consumers; not about driving point A to point B.

  1. Many communities are mixed use, consumers can walk right downstairs and get services and walk to meet their needs.
  2. There’s a decoupling of cargo and passenger transportation – where you buy online, you used to go to the store and then take the goods to your home. In the past (the car) was how I got passengers and cargo home.
  3. There’s an explosion of options, car sharing, ridesharing, bike- and scooter-sharing. Technology’s allowing people to have these on a minute-to-minute basis.
  1. We have to think about end-to-end solutions, not just the car; think about the car, driving to the metro, taking a subway and then get into a car-share vehicle and maybe a bike or scooter to get to your final destination. For companies like us, we think about final solution.”

Q: Is Hyundai setting up a central mobility division?

“We definitely see shifts, our vice-chairman E.S. Chung has personally shown interest and support for our company studying the future of mobility. The strategy and technology division created in Korea is focused on future mobility solutions and services, AI, robotics, energy storage and smart cities. I’ve been working closely with this division providing the perspective of US, studying future mobility and what it means to consumers; not just selling cars but services.

“In the Santa Monica, California area, we partnered with WaiveCar, a new dynamic to car sharing (the company claims to be the world’s first all-electric car-sharing program that runs on advertising dollars). It’s not just Zip Car or Maven, (WaiveCar) sells advertising on the vehicle with a wrap or digital board on-vehicle. They can put any kind of content on there through wireless (technology). We’ve partnered with them and are providing them with Hyundai IONIQ EV and IONIQ HV and Tucson FCEV models. We have plans to deliver more cars in the future. They generate revenue through ad sales and it’s free for the first two hours. [Our partnership] does not include investment in their company, but we are working with them closely. We are thinking about different strategies for people to experience our vehicle and try to have a seamless experience for them to come to a dealer and buy one.”

Q: Do you see more people using a subscription model?

“Subscription is a big trend, there are a lot of OEMs in that space, dealers and dealer groups are rolling out their versions of subscriptions, it’s very early and the definition of a subscription is not clearly defined yet. Volvo’s includes one monthly payment, insurance, and maintenance, but you can’t swap cars; there’s no flexibility.

“There are a lot of people interested in that space. We were one of the first OEMs to go down that path. Our IONIQ EV had an unlimited plus program with maintenance and something pretty unique in the industry, we paid for the electrical charging for their vehicles. We’ve definitely studied the space and we’ve had products out there but it’s unclear what the future looks like. We’ll continue to experiment until we find out what’s the right fit.”

Q: What sort of premium program might Hyundai consider?

When it comes to subscriptions there are two components: cost of ownership, which means maintenance, insurance, everything included and the other portion a lot of consumers are looking for is the flexibility to try different vehicles. Programs like Volvo don’t have that. When we look at our Genesis lineup today we would have the breadth of vehicles that could power such a swap program. That’s where I think the lines get blurred between subscriptions and car sharing, a car sharing program depending on what cars you have there, you can give people the experience to try different vehicles.”

Q: What are the biggest hurdles you anticipate as mobility evolves?

“Up until recently we saw the trend of younger people not buying vehicles but, as they age, they enter into a life stage with a family where it was easy to get by with Uber and Lyft when it’s just yourself, it’s harder to do with one-year-old. I don’t think it’s clear that people in the future don’t want to own cars; I think it’s really about flexibility. Maybe it’s a household that had two cars but now makes do with one and you stitch together experiences of getting around with car sharing/ride hailing. I think that’s something that’s going to continue into the future.”

Q: How much do you think fully autonomous vehicles are going to shape the future?

“We are working diligently on autonomous vehicles. Earlier this year we announced that we are working with (self-driving software start-up) Aurora to develop that technology. Everybody talks about rid- sharing/ride-hailing, that once [vehicles are] autonomous they are going to take off big. I think that is the potential future and an area we are studying.”

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