In the final instalment of their three-part series, Weber Shandwick sector experts Kristopher Spencer, Alejandro Grau and Freddy Choliere explore the future of ride-sharing, electric and autonomous cars in APAC.
When considering the future of the automotive (or any other) industry, one must look to the fast-track Asia Pacific (APAC) region. Specifically, its most influential economic powerhouse, China.
Now a leader in IP development, China has lately rolled out significant plans to raise its profile in hi-tech industries, such as semiconductors, robotics, electric vehicles, aerospace, high-speed rail and new materials.
China’s proactive investment in the tech space is not unprecedented. Having leapfrogged the west in digital applications such as mobile payment over the past ten years, the market currently enjoys a reputation as the most sophisticated ecommerce market in the world.
The impacts of such investment obviously extend beyond the tech sector. With vehicle sales outstripping the U.S. by 68 percent in 2017, China is on track to becoming the world’s premiere automotive hub in the 21st century.
And, its rapid advancement reveals much about automotive’s future as an industry both in APAC and worldwide. In China, sales of new energy vehicles (NEVs), a broad category that includes pure electric vehicles (EVs) and plug-in hybrids, rose by about half in 2017 – but electric-only sales roughly doubled. 2017 also marked the first time electric-only global car sales topped 1 million. China accounted for more than half.
With Beijing’s push to reduce air pollution and dependence on foreign oil, China is targeting sales of 7 million EVs by 2025, spurred by tax rebates and ever-improving range. A recent branded study found one in three Southeast Asian (SEA) consumers planning to buy a car are open to purchasing an EV. The finding demonstrates the region’s strong potential to speed up the electrification of mobility beyond just China (a market famous for its high population of early adopters).
China also appears to be taking the lead in readying self-driving vehicles for production, expecting fully autonomous vehicles to account for 10 percent of car sales by 2030. According to a global survey conducted in 2016 by Boston Consulting Group, the Chinese are the most supportive of autonomous vehicles, with 75 percent in favor of them.
The Chinese aren’t alone in their attraction to self-driving cars, either. Interest is high, according to a December 2016 survey on attitudes towards self-driving cars among drivers in Australia, Japan, Singapore, South Korea and Taiwan. More than half of total respondents said they would consider buying one, with four out of five respondents in Taiwan being most enthusiastic.
While many manufacturers are not openly discussing their plans for EVs and AVs in APAC right now, that doesn’t stop the media and consumers from inquiring about the technology. Many manufacturers are likely to expand their EV productions globally in the coming years. It is probable that this move will even involve the export of EVs from China to markets throughout the region.
However, it will ultimately be up to consumer demand and government policies and incentives to ensure that cities around the region implement plans for appropriate EV charging infrastructures. Developments around self-driving cars, such as vehicle-to-vehicle and vehicle-to-infrastructure communications and regulatory policies are speeding up, but currently expected to be concentrated in major cities.
Recently, Shanghai issued its first self-driving licenses – allowing two automakers to test their autonomous vehicles on public roads. Singapore, meanwhile, could be the first Asian country to widely adopt autonomous driving. Potentially, even, the world’s first. As a sign of the trend, SEA’s leading ride-hailing company has also announced plans to launch self-driving taxis in the region before 2022.
This is particularly significant, given ride-sharing is still a growing phenomenon throughout Asia Pacific with local players in India, China and Southeast Asia expanding fast. User penetration sat at 10.1 percent in 2018 and is expected to hit 13.8 percent by 2022 – with revenue expected to show an annual growth rate of 18.1 percent. According to Statista, this translates to an eventual market volume of US$62.4 million by 2022.
Given this potential for growth and the documented interest in self-driving vehicles in the region, the automaker who manages to introduce the first successful autonomous vehicle solution for ride-sharing in Asia stands to gain significantly from their innovation. More so, if the solution also successfully leverages the regional appetite for electric vehicles.
Asia-Pacific communicators in the automotive sector are navigating a challenging, mutable and electrifying environment. To truly flourish, brands and communicators must negotiate an ever-shifting configuration of market-specific media and consumer insights, adaptable brand and product storytelling, community engagement, and close coordination with marketing counterparts.
What is true today may not be true tomorrow. The developments of one market may ripple across several others. In each territory, media and consumers come equipped with their own expectations and standards. While one market is building infrastructure and embracing the automotive industry for the first time, another is laying the groundwork to be the most advanced market of its kind in the world.
One size does not fit all. In fact, it is rare that one size will suffice for any strategy. And, going forward, the sector’s only going to grow more complex and unpredictable. To engage in Asia Pacific in 2019, communicators must be agile, adaptable, imaginative and well aligned with marketers and product planners to break through the noise and build lasting, sustainable relationships with stakeholders.
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