wedriveThe magazine for automotive and mobility | Issue 01 #01 we drive #01 we

What’s up next?

Market: What does the future hold for the German car industry? Technology: What's the deal with 5G anyway? Interview: How will we get from A to B in the future? from start tofinish. from start entire supplychain– We're improving the Find outmore: kearney.com we from tofinish. mean start When we say end-to-endsupplychain, procurement todelivery ofyour endproduct. andimprovedigitalise every singlestep, from will work side-by-side withyou toanalyse, supply chain work together seamlessly. We Now especially, thatthelinks itisvital inyour

Photo by Rachael Rinchiuso, Chicago Contents Editorial

06 News from Kearney It's 2021. We should have flying cars by now. Or at the very least New commitment, new newsletter, new cars that glide along autonomously and quietly on digitalised, mobility options. fully networked motorways. The air in cities should be clean and healthy and cars should be reliable and environmentally friend- 08 Headlight ly transport partners for specific moments. At least if you believe The 'we drive' column. This issue science fiction films like 'The Fifth Element'. by Christian Malorny and Stephan Krubasik. For some aspects we are already well on our way; other things still need a little bit more time. That's why we've titled this first is- sue of our new magazine we drive 'Where to next?'. We want to 10 Gadget on four wheels take this opportunity to show you what is happening in the world A driving smartphone? How the car is of cars and mobility. We might not be showing off flying cars just becoming a mobile device. yet, but in interviews, reports and studies we will let you know what we're working on and what drives us as specialists, espe- 15 Coronavirus and car sharing cially in our close exchange with our clients. And we'll make it Car sharing in strange times. plain that mobility is currently one of the most exciting topics of all. An area in which automotive companies and their suppliers not only have the potential to change the world of the future, but 16 Cars. A fairy tale? are already actively working to win the future. How will the land of the car position itself in the future? We would love to hear your feedback about our new magazine and what you like and where you think we could do better. We 24 The peculiar glove compartment will continue to experiment so that the magazine is always up to A glimpse into a Kearney colleague's car. date for you.

We hope you enjoy the issue.

Yours, Christian Malorny, Partner & Global Head of Automotive, on behalf of Kearney’s global automotive partners 10

26 In a standstill Why 5G is a prerequisite for autonomous driving – or not.

30 War of talents Why finding skilled workers is so difficult.

32 Next-gen talk Sabine Spittler talks with Door2Door CEO Tom Kirschbaum about the mobility 16 of the future. 32 37 Publisher's details and contact Younger consumers are more willing to change The connected consumer their purchasing patterns With the pandemic making fast and reliable connectivity more important than ever, consumers are demanding even more quality from their digital services.

Our Connected Consumer Index (CCI) pinpoints consumers’ digital usage and allows for comparisons across markets. Kear- ney created the index to establish consumers’ level of digital News usage and allow for comparisons across markets. Together with local price levels, consumer income, and competitive be- havior, the CCI is a key determinant of how much people spend on digital services. Every consumer is assigned points (on a scale of one to 100) depending on the number of services or Podcast Joy@Work devices they have adopted in each of the following categories: telco services, media and entertainment, connected devices. 2020 has brought tectonic shifts to every part of our lives, including our work lives. This sea- 27 son on Joy@Work, we’ll think about how joy kearney.com/connectedconsumer is part of a bigger picture. We’ll have conver- Age 48 Age sations about creating solidarity, connection, and community in our teams as part of a larg- 18-44 45+ er societal move toward higher goals and pur- 52 pose, equality, and justice in our No Normal world. After all, can there be joy without jus- tice? Can we truly operate at full potential at home, with colleagues, and with our loved ones without these fundamentals? Connected consumer index 73

kearney.com/joyatwork

Singapore 48 Spain 46 Try less than 4 new food trends per year South Korea 45 Try 4 or more food trends per year Norway 39 United Kingdom Sweden 38 Denmark 37 Malaysia Portugal 36 United States Romania 35 Switzerland 34 What matters now Netherlands Germany 33 2020 food trends survey: a tale of two shoppers Covid-19 has increased the pressure to act Poland and the wealth of information that needs to Will organic scorpion pepper kimchi be the next acai berry? It’s unlikely, but along the way somebody has probably be dealt with in everyday life. With its new Austria made a case for it, noting how it combines the consumer’s preference for authentic, new, experientially challenging #impact service, Kearney separates the rel- Russia 32 tastes, organics sourced from exotic locales, and ethnic fusion cuisines. evant from the unimportant for CXOs and Kazakhstan If you are like most food retailers or consumer goods companies, you’re probably desperate to discover which new sheds light on questions and trends in a regu- Czech Republic 31 food trends are most likely to excite consumers’ imaginations and capture their dollars. lar online magazine. Get your free version at Slovakia kearney.com/covid-19/european-impact-mag- The problem is, so is everyone you compete with. France azine Southeast Europe 29 Our 2020 Food Trends Survey looked at how a number of diverse elements influence consumers to support one new Australia food trend and not another. Indonesia 26 Ukraine 25 kearney.com/foodtrends2020 Japan 23

6 7 Headlight BY CHRISTIAN MALORNY AND STEPHAN KRUBASIK

Germany presented a draft law governing automated and autonomous driving up Kearney regularly comments here on to Level 4. In effect, this means that self-driving vehicles are allowed to change current issues in the automotive indus- lanes and overtake other road users at speeds up to 130 km/h without intervention try in this 'Headlight' column. Automotive by the driver. This requires comprehensive regulations on vehicles' technical equip- ment and the environmental situation of a self-driving vehicle. The draft German law is currently being negotiated between countries within the UNECE in Geneva. If it passes, the Federal Republic of Germany would be the first country after ratifica- tion to have such far-reaching regulation. From a technical viewpoint, high-priced industry on trial premium vehicles in particular already have the technology. Traditionally, the Ger- man car industry has always played a leading role with regard to necessary regula- tions in Geneva. This strength also benefits other countries and must be maintained with digital technologies and foreseeable necessary data protection rules.

4 The mobility ecosystem and the role of the car: There is still a great deal of uncertainty as to how the automotive industry should deal with the mobility ecosystem. This includes, as an example, the processing of data that a car gener- Christian Malorny ates during operation. New business models will be created on the basis of this When it comes to technical, regulatory data. There is great concern that tech companies, start-ups and other firms – with and political issues of the future, sus- their agile, data-savvy organisational structures and capabilities – are superior to tainable business models and global and The automotive industry is facing ma- 1 Climate policy targets and the impacts on the value chain, their distribution car manufacturers and could make a lot of money along the life cycle of the car. To- regional growth strategies in the auto- jor challenges on the road to the future. and employment: Most recently, the presentation of the 'Green Deal' to the day the market for automotive services is worth around 730 billion US dollars. It will motive industry, Christian Malorny is the It is going through a transformation European Parliament on 16 September 2020 by EU Commission President Ursula grow to around 2,700 billion dollars by 2030 through new, data-driven business person to speak to. As a partner at Kear- on all levels: technology, markets, val- von der Leyen made it unmistakably clear that the automotive industry's alignment models – a threefold increase within a decade. But time is pressing. The automotive ney and global head of the automotive ue chains, user behaviour – everything with climate neutrality by 2050 will be the dominant political topic in the coming industry must find an answer to how it wants to set up the data network with its consulting division, he drives strategic is changing. Those who thought that years. By 2030, CO2 emissions for new cars are expected to reach 60 g/km, which clouds, algorithms and data transfer technologies and which data will be made and operational change for automotive the change could be carefully man- means an average consumption of 2.5 litres of petrol per 100 kilometres. A stricter available, to whom and under which conditions. manufacturers and suppliers. aged over several years are mistaken. target of below 50 grams is currently being discussed. Even today, around 60 per Increasingly challenging legislation, cent of suppliers state that the decline of the internal combustion engine – which 5 Social dialogue on the importance and role of the car: More and more fre- aggressive competitors and techno- has more than 1,000 components – is leading to staff cuts or relocations. Twofold quently, the impression is that media, politicians and NGOs are leading the logical advances are fuelling the pace. solutions must be found: firstly, viable 'end-of-life' concepts for the internal com- way in reporting on the role of the car. The general message is rather critical and Added to this is the Covid-19 pandem- bustion engine, which will still be needed for a long time to come, and the hundreds negatively affects how society perceives the car and the automotive industry. The ic, which has triggered global buying of thousands of jobs in Germany that depend on it; and secondly, attractive added relevant institutions of the automotive industry have shied away for too long. This restraint. There are lots of questions to value in Germany for components of electric and fuel cell vehicles. This will only has to change. Facts, data, information and objective knowledge must once again be answered and lots of solutions to be succeed if manufacturers, suppliers, trade unions and politicians work together. find a stronger voice within the social debate. Communication must be modern and found. At the core are six themes for contemporary along all communication channels, especially on social media. The which industrial policy responses are Protectionist economic policies and their impact on free trade: No other in- shaping of opinions on social media and thus the influence on the political process 2 needed: dustry is as heavily reliant on global value chains and free trade as the automo- is much too important. tive industry. The global revenue and profit pool of the automotive industry has Stephan Krubasik doubled since the 2008 financial crisis. Nearly all car manufacturers and their sup- 6 Digitalisation of the value chain for greater productivity and flexibility: The primary goal of Stephan Krubasik, pliers have invested massively in international markets around the globe. The trans- Artificial intelligence in the context of Industry 4.0 is especially important for partner in the Munich office, is to give formation and the resulting pressure on jobs could entice national governments to countries with ageing populations and which will therefore experience enormous his clients in the automotive industry a adopt protectionist economic policies. Customs tariffs, import restrictions or regu- workforce scarcity over the next 20 years. Uniform data standards and interfaces competitive edge. His projects with car latory restrictions on approval are already the instruments of choice. This calls for are needed here in order to efficiently conduct and control global value chains. manufacturers and system suppliers in- an industrial policy response from the automotive industry at international level so Since countries are in competition with each other in this respect, developing clude corporate and product strategy, as not to jeopardise growing prosperity through globally distributed value creation. common standards takes a while. But time is pressing here too – especially for Eu- comprehensive transformation, prod- rope. Other sectors show that market size and therefore market power are essen- uct development, product cost manage- 3 Digital functionalities and technologies require complex international and tial criteria for achieving process standards. The USA and China have a clear ad- ment and quality. Stephan Krubasik is national regulations: New digital technologies also mean new legal issues – vantage here. But care must be taken to ensure that standards are not abused to Head of Automotive at Kearney in Ger- and these are complex. For example, in September 2020 the Federal Republic of close off markets. many, Austria and Switzerland.

8 9 Gadget on 4 BY RICHARD MÄNNIG wheels

The wheel is not being reinvented, but the rest of the car certainly is. In future, your experience inside your car will be defined even more by the info- tainment system – and by the platform on which it runs. Lots are being drawn for an important unique selling point.

The automotive industry is facing numerous upheavals. New whole car experience? Do we have the resources and exper- means of propulsion are vying for the favour of customers and tise to build a high quality infotainment experience that can the environment; sharing models are turning the concept of compete with the high standards customers have come to ex- car ownership on its head. What's more, in the future passen- pect of smartphones and apps? If so: great." In this case, the gers will be able to dedicate themselves wholly to onboard situation would be comparable to Apple, which back then de- infotainment in a self-driving car. Whether combustion ve- cided to build an entire ecosystem around the iPhone and iOS. hicle or electric, shared or private space, with one hand on With iTunes and later Apple Music, the consumption of music, the touch screen or speaking with the virtual assistant – the films and TV series was tied to their own ecosystem as tight- infotainment system will become increasingly important. Al- ly as possible. Having a controlled App Store allowed them to though the extent to which the infotainment system can ac- standardise and integrate security and the experience itself. cess functions in the car varies, currently it sees itself as an This ultimately led to Apple building an enormously powerful important part of the car's system. It connects the world in- position, controlling essential structures and making the com- side the vehicle with that outside by giving the driver access pany the world's most valuable brand. to music, navigation and ever more applications. At the same Another possibility could easily be referred to as the Sam- time, its external connectivity provides the basis for digital sung Way. Applied to in-car infotainment, this would mean a services and content from outside the vehicle. Volvo's Pole- focus on hardware design and user interface design. OEMs star 2 comes with the Android Automotive OS operating sys- would concentrate on their core strengths and develop and tem, with an infotainment system that includes apps for pur- build high quality vehicles, while digital infotainment would poses ranging from finding charging stations to operating the largely be taken on by tech players. This is comparable to air conditioning. However, driving and safety functions are Samsung, which once relied heavily on cooperation with still controlled by the software of separate ECUs. But what Google for the software side of its smartphones. At that time does the digitalised in-car experience of the future look like? this was certainly the right way: Apple was threatening to dominate the smartphone market with its iPhone, while Sam- Software giants in the car sung countered with the combined strength of its own hard- Major tech players such as Google and Apple dominate the ware expertise and Google's software know-how. Having said digital markets of the West. With their mobile operating sys- that, Samsung is still dependent on Google today and, com- tems, they initially expanded their influence via software and pared to Apple, earns very little from services and content. hardware but are now orchestrating the world of digital adver- Huawei now wants to take the third, new path in the hard- tising as well as the games, music and film industries. Domes- ware-software battle with its Harmony OS 2.0. The new ver- tic appliances are ready to be connected to an all-embracing, sion of the mobile operating system, originally developed for networked ecosystem – and the tech giants have been push- smart home gadgets, will run on Huawei smartphones from ing into cars for years. October 2021. This ambitious path, designed to free the Chi- For Arne Junker, Manager at Kearney, OEMs have to ask nese company from dependency on US companies, is also themselves: "How do we secure the user interface while creat- the most difficult – remember Tizen from Samsung, Fire OS ing a competitive digital customer experience in and around from Amazon and the Windows Phone from Microsoft, all of the vehicle? Do we have it in our own power to create the which failed to find a foothold? Will an OEM dare to follow a

10 11 Primary use Another reason motorists reach for their smartphone instead of an in-car system: they think the features are too low qual- of the smartphone in the car ity or too complicated. Customers also miss their personal % of respondents Germany data – after all, their smartphone knows their calendar and N=500 per country, May 2019 China their favourite playlist equally well. This is especially true in China, where platforms are particularly distinct and deeply Finding and integrated into the most diverse areas of life. Navigation listening to music Tech is trendy 39 30 If future customers were given free choice of software for their in-car infotainment system, those platforms they use 80 67 regularly would be in high demand. Fewer than 20 per cent of respondents preferred an OEM system. Software from one of Comparing the digital big players is what the majority of drivers want. The fuel prices Polestar 2, for example, comes fitted as standard with an info- Phone calls tainment system based on Android Automotive OS, and other models from FCA, GM and PSA will follow shortly – which will 33 32 further increase demand for 'real big tech' in the car. Is this increasing influence of the US and Chinese tech 59 52 players a curse or a blessing for the car industry? After all, OEMs want to offer their customers an appealing digital ex- perience in the car, but they do not want to give up control Finding a Checking the or data. parking space calendar Andreas Form, partner at Kearney in Munich, is well aware of car industry fears that tech players could use data from 14 10 the car for their own services. "But players such as Apple and Google already have much of the data from driving anyway – 37 10 like location data – and already use this up-to-date metadata for personalised advertising. This is all they need for their cur- rent business models". On the other hand, OEMs naturally also want to under- similar path for car-based software? Volkswagen's announce- stand their customers better – and the best way to do this is ment that it will develop its own operating system for the en- through smart analysis of data. Yet for Andreas Form, OEMs tire group fleet under the brand name VW.OS certainly sounds should first ask themselves what data they really want and can like it. However, Arne Junker sees a strong marketing aspect use. By first developing the greatest potential and finding out in this: "VW considers the question of operating systems to how to generate added value from that (for example Option- be so important and differentiating to customers that they are as-a-Service), OEMs can pave the way for themselves to ex- even giving the whole thing its own brand (VW.OS)." Howev- ploit data in the mobile future. er, a look under the bonnet of the VW.OS infotainment domain reveals some familiar components – in presentations at indus- Area of conflict try conferences the well-known Android robot could be seen. A solid foundation is needed to bring all these aspects togeth- er, a foundation that must also take into account the similari- The force of habit ties and dependencies between different ECUs. Such a base At Kearney, no one is surprised at the recourse to the familiar operating system in a car is the interface into which other and established. In the end, it cannot be ruled out that future car customers might prefer the familiar interfaces and operat- ing logic of Apple, Google or Chinese companies. Those op- erating systems they are used to, at home and on the road. The main reasons motorists use their The well-known voice of Siri, the standard message alert of smartphone instead of the car's own Android, the usual connectivity of Tencent – in addition to the numerous features with which users interact on a daily basis. service For example, a Kearney study found that 40 per cent of motor- Feature is Feature not ists in Germany primarily use their smartphone for navigation low quality available and therefore either do not have a separate satnav or simply prefer the smartphone app. According to the study, this num- ber is twice as high in China. In hyperconnected China in par- 43 28 ticular, motorists also use their regular smartphone functions 1 2 such as music and phone calls or car-related services. 51 47 So why can't smartphone users let go of their digital com- panions even when driving? Why don't they just use the servic- Lack of es and functions built into the car? On the one hand this can Feature too personal data complicated & content be explained by the fact that the features they want are simply not available in the car. Only about half of all current cars are equipped with the required head units. And even if, as planned, 24 21 about 85 to 90 per cent of all cars have them by 2025, they still 3 4 won’t include all features. With some manufacturers, finding a 47 31 parking space or creating automated travel routes, for exam- ple, will be additional options that require payment.

12 13

Survey period: July 2020 solutions can be integrated, more or less deeply. Arne Jun- Which software should control your Survey method: Google Survey ker is initially pushing for a middle course for the infotainment Covid-19 & Population: N=114, How often did you use Survey of more than 100 German domain here – namely "an OEM-controlled operating system car's infotainment system? members of car-sharing services that allows, for example, the integration of third-party content car sharing before and applications through virtualisation or hypervisor solu- Google Android Google Android Covid-19? Apple iOS Apple iOS car sharing tions". But Junker points out that manufacturers should con- OEM System Baidu / Alibaba / Mobvoi / iFLYTEK sider different options and requirements depending on their Amazon Alexa OEM System Multiple answers are possible positioning. Volume OEMs may be better off with an Android Other 2 1 Other Daily / More frequently Figures in % Automotive OS-based integration that appeals to the majority 15 12 Almost daily than once a week of their broad customer base, allowing them to more quickly 41 18 6 Less use, as the risk of infection is higher than, for example, with bicycles reach the levels of quality of the in-car experience of premi- 19 50 Why has your um OEMs. For premium OEMs, however, customers expect a 6 19 Never, although Three to four seamlessly integrated, maximum quality infotainment experi- 19 usage changed? 23 I am a member timesa month More use, as the risk of infection is lower than, for example, on a bus/train ence that is as individual as the vehicle itself. 20 16 8 Reduced need for personal mobility, for example because of working from home The status of the car 35 One thing is certain, the importance of the car in the future will be decided in the next few years and its status and how it 34 18 No change since the beginning of the coronavirus crisis is used will change fundamentally. Arne Junker and Andreas 38 Less than Once or twice Form also agree: now is the last chance for OEMs to answer once a month a month the strategic questions about the digital experience in their vehicles. Those who do not take decisive action now will lose customers who want to be networked, informed and enter- Higher hygiene standards, e.g. more frequent cleaning Under what tained in their vehicles. Or they risk being just another device 14 in the a tech player’s vast ecosystem – a really big gadget with Empirically there is a stark discrepancy between members circumstances of car-sharing services and actual users. Only members Increase in need for personal mobility, e.g. less working from home four wheels. who use car sharing at least once or twice a month or 21 would you use more often (~45% of participants) are considered active users. All of the charts below show the responses of Lower prices car sharing more active users. 17 often? No increase in use foreseeable in the medium term 12 How has the frequen- No change since the beginning of the coronavirus crisis cy of your use changed 37 since Covid-19?

Permanent availability of the vehicle No Usage 15 What are the main change increased reasons you would Lower costs with regular use of the vehicle 38 10 19 be interested in a

Greater hygiene/cleanliness through exclusive use of the vehicle subscription model? 19

More privacy, e.g. leaving things in the vehicle 17 35 12 Usage stopped Frequency completely reduced Personalisation of my own vehicle, e.g. model, colour 21

I am not interested in a subscription model as an alternative 58 Would you be interested in a subscription model* Less than €200 as an alternative to car 10 How much would you be prepared to pay for a sharing? €200 to 300 12 subscription per month?

€300 to 500 incl. vehicle, insurance, 6 taxes, maintenance and tyres

58 42 €500 to 750 No Yes 10

More than €1000 4

I am not interested in a subscription model as an alternative *exclusive use of a vehicle e.g. can be terminated on a monthly basis. 58 14 15 Cars. A fairy tale?

BY MARTIN TROCKNER

16 17 The future of the automotive industry seems particularly uncertain right now. But what will decide between success and failure?

4‘ in Grünheide, Brandenburg, with an es- Of course, ‚premium‘ is not simply a timated output of 500,000 electric cars, magic ingredient that you add. Premium is not a fluke, but a calculated move: a US is both an expectation and a concept, tech company is setting up shop in the which can be described fairly precise- powerful and proud territory of automo- ly in relation to the German car indus- tive engineering. A clear signal that the try, as a recent study by Kearney shows. future of the global automotive industry Respondents cited pioneering design, will be decided in Germany. high-quality look and feel, excellent The coronavirus has not changed an- workmanship, desirable brands, innova- ything in this regard, nor, according to tive technology, first-rate handling and Kearney‘s projections, will its future im- exemplary climate protection. Driving pact be long-lasting. One thing is certain: as pleasure, we could say. All very true, the automotive industry was hit hard by but not enough to secure the dominant the pandemic and will continue to feel its position of the premium manufacturers, effects in the third and fourth quarters of above all the German car industry, for this year. But the recovery could come as the next few years. early as 2021. According to estimates by This is because most of the factors uality over quantity is the motto when it Kearney, the European market is expect- in the study relate to a purely physical Qcomes to the success of the car indus- ed to shrink by 24 per cent this year com- product experience – with the excep- try – at least for premium manufactur- pared to 2019 (and 29 per cent in North tion of customers‘ emotional brand loy- ers, who, with 25 per cent of all vehicles America). The market recovery will move alty. However, in the course of the digital sold worldwide, account for half the ahead in 2021 but volumes are expect- revolution, it is becoming apparent that total profit. But the lucrative premium ed to decline by 16 per cent (Europe) and the digital aspect very probably does car model is under threat – especially 18 per cent (North America), again com- not (yet) have the potential to differen- the German one. The market, customer pared to 2019. tiate automotive premium in the long expectations and the understanding of The fact that the future of the car term. „Although 65 per cent of German mobility are undergoing rapid and rad- industry is being decided in Germany car buyers describe themselves as ‚dig- ical change. Those who don‘t change is down to the premium factor: in other ital leaders‘ in everyday life, the digital their way of thinking now could soon be words, the willingness to pay more for a aspect does not yet factor into premium at a disadvantage – especially since the product than for an objectively compara- as a differentiating element. Contempo- showdown on the future of the global ble competitor model. That might sound rary digital solutions in vehicles are rath- car industry will be decided in Germany blunt, but it is vitally significant for the er seen as a requirement,“ says Christian and nowhere else. profitability of car manufacturers and for Malorny on the current situation. Six years. This is the unit of meas- the prosperity of countries with an auto- Is digital marginal? The concept of urement that separates the present from motive industry. „Only premium prod- premium as applied to Elon Musk‘s com- the future of the automotive industry. Al- ucts, i.e. those products that we find de- pany is a digital one. Compared to any legedly. The figure came about when the sirable as customers, that we absolutely other car manufacturer, Tesla is the mas- Japanese daily newspaper „Nikkei Asian must have or at least want to be seen with, ter of digital features in the vehicle, such Review“ had a Tesla Model 3 dismantled make it possible to maintain the German as ‚over-the-air‘ software updates for the earlier this year and the vehicle‘s central business model with its comparatively vehicle‘s central computer and its use of control unit (Full Self-Driving Computer high-earning workers and costly social artificial intelligence. - FSD) was examined in more detail. Af- structures and benefits,“ says Christian This does not help Tesla stand up to terwards, two things were agreed upon: Malorny, Kearney‘s global head of motor- premium car manufacturers, especial- First, no one else can build such a thing ing. Let‘s look at an example. In 2019, the ly the Germans. „Elon Musk knows that today (say the experts). Second, Tesla is German car industry produced around 16 Germany is the only place Tesla can learn at least six years ahead of all of the oth- million vehicles – 4.6 million of them in how premium really works in the global er manufacturers (or so the „Nikkei Asian the Federal Republic of Germany alone. automotive market,“ explains Malorny. To Review“ said). Three quarters of these 16 million vehi- achieve lasting profitability, the compa- Whether this figure is correct or not is cles were premium models, representing ny must demand premium prices – and irrelevant. Tesla cannot and will not con- 35 per cent (40 billion euros) of the glob- offer premium quality. This is where Tes- quer the global automotive market just al profit of all car manufacturers (110 bil- la is weak. The design is not unique and with one central control unit, however ad- lion euros).To put it another way, premium attractive enough, the quality of work- vanced it may be. And Tesla knows it. The vehicles generate 85 per cent of the total manship and finish are critical, service is planned construction of the ‚Gigafactory profit of German car manufacturers. below average. This is underlined by the

18 19 The conflict between hardware and soft- ware will become increasingly important in the future. customer satisfaction study by J.D. Pow- tian Malorny, „would then end up where tomotive market, states that „Chinese er (2020), which puts Tesla firmly in last we are today with our smartphones, tab- technology companies are determining place with 250 technical problems per lets and laptops. Mobility becomes simply the future of global mobility“. In China, 100 vehicles. a tool that is the same for everyone.“ 55 per cent of consumers are in favour of The future of the premium automo- A similar trend was apparent at this considering buying a premium car from tive industry is also an area of conflict be- year‘s Consumer Electronic Show in Las a Chinese manufacturer (not a joint ven- tween hardware and software. Because Vegas: the vehicle as a faceless, auton- ture) within the next five years. This is a just as Tesla is trying to learn German omous driving platform, perhaps best clear warning signal to foreign premium premium, car manufacturers are trying symbolised by Toyota‘s e-Palette con- manufacturers, who at the moment are to teach themselves to understand digi- cept. But how realistic is the assumption able to generate decent sales figures in tal premium as it applies to products. The of an automotive platform landscape that China but could see these decline in a problem with this type of digital revolu- focuses on functionality, standardisation few years time. tion is that it requires an almost Coperni- and uniformity rather than on the expe- It is primarily the young Chinese can paradigm shift. Because the current rience? „There is no doubt that customer brands that appeal to customers and that IT logic is decentralised. The vehicle re- segments will emerge comprising those are aiming their vehicles towards the phys- ceives information from countless ECUs who want to get from A to B as efficient- ical and digital premium factor. Or to put which, including the software, are largely ly as possible and who do not care what it a better way, towards the digital Chinese produced by suppliers. This has been the type or brand of vehicle they are sitting premium. Apps that are only available in way for over 80 years and has resulted in in,“ says Andreas Form, partner at Kear- China are often offered here as standard a stable, collaborative and successful in- ney and expert in sales and marketing in from the factory. The digital aspect in the dustry structure. The transition towards the automotive industry. The question is vehicle is a matter of course and is so so- a purely central logic is highly complex, whether these customer segments will phisticated that vehicles from the manu- and not just from a technical viewpoint. become decisive for the future of the car facturers NIO or BYTON resemble ‚driving External code cannot simply be imple- industry. Is the best advice for today‘s computers‘ and there is hardly any differ- mented into a central unit and is usually premium manufacturers to adapt and ence in usage compared to smartphones the intellectual property of the supplier. transition to such a pure platform land- or home PCs. The result is that traditional Besides the amount of time that both scape now? There‘s one problem: given premium, such as that offered by German the Germans and the Americans would no premium models and mere low cost car brands, is at risk of losing ground in have to spend to master the respec- mobility you don’t earn money. China. It is not that vanity and brand pres- tive premium of the other, they are also The conflict building up between pre- tige have diminished. Rather, Chinese car faced with exorbitant investment costs. mium mobility and platform mobility will manufacturers are concentrating on their „Partnerships between car manufactur- also extend to production methods. On own market and offering specific solu- ers and tech companies, practically the one side are the micro-factories, which in- tions for it. The Western digital aspect – best of both worlds, could be a solution,“ clude many well-known production sites, especially the Western Internet – is by- notes Andreas Form, partner at Kearney. especially in high-wage countries, which passing the reality of Chinese life. If it weren‘t for concerns about data sov- benefit from high flexibility and the abil- What will tip the scales is probably ereignty and fears that tech companies ity to produce small quantities of a spe- electric propulsion. In 2021, manufactur- could much more agilely and quickly im- cific model. On the other side the giga- ers will have to pay around €95 for every plement completely new business mod- factories stand waiting, representing gram above the limit of 95 grams of car- els using data from a car or its driver. high productivity and high volumes – bon dioxide (CO2) per kilometre – for Which in turn raises a completely dif- highly efficient and fast production lines. every vehicle sold. And the EU‘s ambi- ferent question: is it even worth it for the Only the latter are barely feasible in high- tions towards climate neutrality for 2030 car manufacturers? If you believe glossy wage countries – perhaps only for Tes- and 2035 are even more aggressive. It is brochures from IBM or Amazon, the an- la. Take Germany for example: „Here we self-evident that in this country the focus swer is no. According to IBM‘s study ‚Au- have a comparatively high cost structure, is on electric propulsion and plug-in hy- tomotive 2030: Racing towards a digital the highest energy prices in the world, brids. The coronavirus economic stimu- future‘, 48 per cent of consumers say that cost-intensive social security, complex, lus package will be helpful here – at least the car brand is not important to them in expensive administration, many public in the short term – although it should be a future scenario of mobility service pro- holidays, regulated working hours and le- seen rather as some kind of start-up fund- viders and self-driving vehicles. Price and gal certainty that is second to none,“ ex- ing. Daimler boss Ola Källenius said in an convenience are the decisive factors. plains Christian Malorny. Gigafactories interview with Der Spiegel that the num- And yet these criteria are not compatible can only be set up where the cost factor ber of electric cars will rise to a few tens of with the current understanding of premi- is low or if they are highly automated. thousands in 2020 and then very rapidly um. Reading between the lines reveals In fact, scenarios are already emerg- to hundreds of thousands. Daimler wants something else. The mobility of the future ing in China that could be significant for to quadruple its share of electric and hy- might perhaps no longer be character- the entire industry. In a recent Kearney brid vehicles (most recently two per cent ised by an individual premium experience study ‚Consumption Upgrade! – Next lev- of group sales worldwide) this year and that also has as its origins the consumer‘s el brand evolution in the Chinese auto- double it again in 2021. BMW, too, wants notions and vanity („I want to drive a Por- motive market‘ Thomas Luk, partner at to achieve two thirds of its (CO2) reduction sche“). „The car industry,“ explains Chris- Kearney and expert on the Chinese au- with electric cars; Volkswagen has similar

20 21 Space for people and vehicles is becoming scarce; giving up one's own car, surrounded by public transport and shared mobility solu- tions, is the inevitable result. plans. The only problem, premium quality is not available in fully electric vehicles to the same extent as is usually the case in this segment. The classic ‚engine sound‘ and ‚acceleration‘ as distinguishing fea- tures virtually disappear. „Car manufactur- ers will certainly have to find a new type of premium for electric vehicles. It is conceiv- able, for example, that a completely silent electric vehicle could be considered such a feature,“ says Christian Malorny. But also range, battery cycle stability, charging ex- perience and finally driving pleasure are still nascent differentiating factors. But there is another development that must be taken into account, which will be critical for the showdown of the car indus- try. Namely that space is becoming scarce in cities. The statistics portal Statista pre- dicts that globally the proportion of the population living in cities will reach 68.4 per cent in 2050 (2020: 56.2 per cent). More than 200 million people in China al- ready live in an urban area. Capacity or space for people and ve- hicles is becoming scarce; giving up on the notion of having one‘s own car in the big city, surrounded by public transport and a growing number of shared mo- bility solutions, is the inevitable result. Car-sharing statistics for 2020 from Bun- desverband Carsharing, the German as- sociation of car-sharing services, are clear: The number of sharing vehicles increased by 25.7 per cent compared to 2019 and the number of providers rose from 45 to 226 nationwide. And the big- ger the city, the better the services on offer. The automotive industry there- fore needs different solutions for the city and for the country. Self-driving vehicles could initially ease the situation in the city, if ‚driving in the gap‘ becomes pos- sible resulting in a significantly better use of road space. So what ultimately will decide the future of the automotive industry? Cer- tainly not a single factor, but rather the interplay and shifting of the respective parameters in the coming years. The fact is that the world still wants premium cars, especially from Germany, and producers must take this desire to a new level. The conflict between physical premium and digital premium will likely be the deci- sive factor but not in the sense of ‚one or the other‘. The manufacturer that is the first and best to combine the two worlds will win the showdown in Germany, and probably globally too.

22 23 BY THOMAS LUK, PARTNER AT KEARNEY AND The peculiar EXPERT ON THE CHINESE AUTOMOTIVE MARKET

"Actually I only use my glove compartment as an emergency solution – ideally, I don't need the items at all or only rarely. Among other things are the obligatory insurance policy, charged battery pack with solar panel, charging cable for Apple devices and a powerful torch. Even the wine textbook, which I need to prepare for my exams to become a sommelier, is a second backup copy, which I like to give to my passenger on longer journeys." glove compartment

24 25 BY DOMINIK WÜCHNER

In a

When talk turns to the roll-out of the 5G mobile standard, sooner or later the sub- ject will end up on autonomous driving. Often it is said that a country without standstill proper 5G will rapidly fall behind. But things are not that simple. What would you do if in the future you no longer had to control the vehicle yourself, but thanks to modern technology could enjoy the ride as a passenger? Are you one of the courageous 13 per cent who, according to a YouGov survey, trust their car so much that they would use their free time for a nap? Or perhaps you are one of the third of respondents who feel a little uneasy about the thought of giving com- plete control to the car. Which is why you always keep a watchful eye on the vehicle and the road while driving. Perhaps you would also use the time to talk with your

26 27 passengers, make phone calls, read or says Luk. Tesla already equips each of After all, vehicles from different manu- be better off with 5G mobile. As expect- eat. According to the survey, you would its vehicles with eight cameras that facturers should be able to communi- ed, the most prominent proponent of be in the company of one-fifth of re- provide 360-degree visibility. In addi- cate with each other – including across the new technology is the '5G Automo- spondents. But whether beauty sleep or tion to these are twelve ultrasonic sen- national borders. But that is precisely tive Association'. In addition to the car surveillance mode: the brave new world sors, which are intended to ensure even the problem at present. Audi, BMW or manufacturers mentioned above, it in- of the car will be nothing without the greater safety. It is safe to assume that Daimler rely on 5G technology for V2X cludes device manufacturers such as Er- new 5G standard – how we often hear this number will increase in the future. communication and have joined forces icsson, Nokia and Huawei, chip manu- and read about it, the future of driving is And with no need for 5G. with other technology and IT companies facturers such as Qualcomm and major at stake. Is that really so? in the '5G Automotive Association'. Chi- telecommunications companies such as To ruin the suspense straight away, Able to cope with any situation na is also building on the 5G standard. Deutsche Telekom. However, many ap- self-driving cars are doing fine without In order to be able to travel safely and VW is also part of the Association, but plications can also be implemented with 5G. And so they should. To understand comfortably in the future, however, vehi- does not want to wait for 5G and, like today's LTE standard. 5G goes one bet- why, it is worth taking a step back. We cles should be able to talk to each oth- Renault and Toyota, is taking a differ- ter with its greater bandwidth and low should be asking ourselves what a car er and to the infrastructure in addition to ent approach. They currently use a wire- latency – but first it has to be rolled out. has to do to operate safely and inde- the on-board aids. Ultimately, sensors too less technology called Dedicated Short pendently of any human control. The an- will reach their limits. At the same time, Range Communication (DSRC) – also Time is running out swer is simple: It should be able to de- the wealth of safety information is sim- called ITS-G5 in Europe – for V2X com- At this stage it is not clear which stand- tect any situation that is critical to its ply massive. In future, communication munication. The advantage is that DSRC ard will prevail in Europe for vehi- driving mode. It must interpret poten- between human drivers will have to be is already fairly well developed and is cle-to-vehicle communication. And that tial challenges and then make the right completely mirrored by ones and zeros – used in automated toll systems, for ex- could still become a problem. Because decision. Given the above, it should be including hand signals and other non-ver- ample. It is therefore a proven technolo- the lack of an agreed standard also hin- clear that an autonomous car cannot de- bal communication. Think of something gy, although not with all the advantages ders the second important requirement pend solely on a mobile phone network as simple as an overtaking manoeuvre: of the new 5G V2X technology, which in- for comprehensive autonomous driv- for critical decisions since these are sys- human drivers pull out briefly before clude better reliability, lower latency and ing: the necessary network effects will tems that are never 100 per cent reliable overtaking and check whether the on- a higher range. be achieved only when a critical mass – as we can still painfully see in Germany. coming lane is clear. Would we forgive an of vehicles is equipped with compatible The danger would be far too great that autonomous car for swerving in this way? 5G brings convenience to the car short-range communication technolo- a vehicle would perform an emergency Doubtful. However, if the vehicle in front One thing is clear: Vehicle-to-vehicle gies. "Car manufacturers must therefore stop if it inadvertently entered a dead provides information to the other that the communication without network cov- equip their vehicles with appropriate zone. If we were to rely on a nationwide road is clear, the following car no longer erage will initially be the decisive fac- communication options as soon as pos- 5G network as a prerequisite for auton- needs to pull out to check. Or consider tor in autonomous driving – but this sible. They must also configure them to omous driving, the dream of a self-driv- convenience: only when cars can com- does not mean that the 5G mobile net- send messages – such as the intention ing car would remain a dream for a long municate with each other or with traffic work will not have a role to play. With to change lanes – even if nobody can time. "A 5G network alone will not be the lights and other infrastructure will coop- its greater range, it allows for a more receive the messages yet. This is the technical basis for autonomous driving," erative driving – in addition to purely au- comprehensive networking of all road only way to achieve a critical mass that says Thomas Luk, partner at Kearney and tomated driving – become possible. And users. Information such as up-to-date will enable the autonomous vehicles expert on autonomous driving. this is crucial for the future quality of traf- maps, the current traffic situation and of tomorrow to respond to these mes- fic. Experts describe all these examples urgent warnings, as well as coordinat- sages – it's a classic network problem," Plentiful technology under the cryptic term V2X communi- ing information on traffic management says Freyberg. But if 5G is not the all-important compo- cation (vehicle-to-everything communi- can be exchanged. Coordinated driv- But while the United States and China nent, what is? First and foremost, tech- cation), meaning direct communication ing, such as clearing traffic jams, is also are already putting the necessary rules nical aids that are installed directly in between cars or between the car and conceivable in the long term. However, in place, Europe is still undecided. This the car (some of which are already in the infrastructure without needing to go 'edge computing' is needed in order for needs to change as soon as possible. use today) are more important: camer- through a mobile phone network. And the exchange of data via mobile radio Instead of constantly conjuring up the as that keep watch all around the car, ra- this is precisely where 5G as a technolo- to function quickly. The information is ostensible key role of a 5G network for dar sensors, or a lidar scanner that uses gy could come into play. Could. processed in the radio masts along the autonomous driving, all stakeholders laser beams for scanning instead of ra- Because there are many different route, not just in the control centre. The should join forces to agree on uniform, dio waves like in radar. The on-board technologies for this direct communi- advantage is that data transfer is quick- future-proof standards for vehicle com- computer uses the data obtained in cation – 5G is just one of them. "It is er. Even when it comes to installing new munication and bring them to the mar- this way to construct a virtual model of therefore more important to develop a software in the car, the mobile network ket – starting with car manufacturers, its surroundings and make its driving common standard for communication – makes more sense. Last but not least, it chip and device manufacturers, indus- decisions. "Cars will be aware of their at least within larger geographical are- opens up the chance to offer more lux- try bodies and state regulatory authori- environment and process the mass of as," says Axel Freyberg, partner at Kear- ury to travellers. In future, anyone want- ties, through to the major mobile phone information in a decision-based way," ney and telecommunications expert. ing to stream a film while driving would providers.

28 29 Around the world, mobility is facing a revolution: Now that countless small technical aids are already 5G making our day-to-day lives easier, automated and networked driving will offer multiple new possibil- ities in the near future. Increasing digitalisation will fundamentally change driving, travelling and transporting goods. Cars will communicate with each other and warn each other of dangers. The data for this will be provided by the vehicles them- selves or by intelligent information systems along the traffic routes.

1 passengers, make phone calls, read or says Luk. Tesla already equipsAssisted each of driving After all, vehicles from different manu- be better off with 5G mobile. As expect- eat. According to the survey, you would its vehicles with eight camerasThe firstthat vehicles facturers with should awareness be able of their to communisurround- ed, the most prominent proponent of be in the company of one-fifth of re- provide 360-degree visibility.ings In addiwent- intocate mass with productioneach other –at including the end acrossof the the new technology is the '5G Automo- spondents. But whether beauty sleep or tion to these are twelve ultrasonic1990s. sen They- national already takeborders. over Butcertain that drivingis precisely tasks tive Association'. In addition to the car surveillance mode: the brave new world sors, which are intended to ensurein simple even driving the problem situations. at Onpresent. the motorway, Audi, BMW for exor- manufacturers mentioned above, it in- of the car will be nothing without the greater safety. It is safe to assumeample, that they Daimlerautomatically rely on maintain 5G technology a safe distance for V2X cludes device manufacturers such as Er- new 5G standard – how we often hear this number will increase in thefrom future. the vehicle communication in front. However, and have the joined driver forces must icsson, Nokia and Huawei, chip manu- and read about it, the future of driving is And with no need for 5G. constantly monitorwith other the technology system. and IT companies facturers such as Qualcomm and major at stake. Is that really so? in the '5G Automotive Association'. Chi- telecommunications companies such as 2 To ruin the suspense straight away, Able to cope with any situation na is also building on the 5G standard. Deutsche Telekom. However, many ap- self-driving cars are doing fine without In order to be able to travel safelySemi-automated and VW is drivingalso part of the Association, but plications can also be implemented with 5G. And so they should. To understand comfortably in the future, however,This isvehi the- stagedoes we not are want at currently. to wait Thefor 5Gapplications and, like today's LTE standard. 5G goes one bet- why, it is worth taking a step back. We cles should be able to talk to thateach theoth -carRenault can assume and Toyota, are becoming is taking more a differ and- ter with its greater bandwidth and low should be asking ourselves what a car er and to the infrastructure in additionmore complex, to ent althoughapproach. the They driver currently still has use to akeep wire a- latency – but first it has to be rolled out. has to do to operate safely and inde- the on-board aids. Ultimately, sensorsconstant too eye less on thetechnology systems. called Dedicated Short pendently of any human control. The an- will reach their limits. At the same time, Range Communication (DSRC) – also Time is running out 3 swer is simple: It should be able to de- the wealth of safety information is sim- called ITS-G5 in Europe – for V2X com- At this stage it is not clear which stand- tect any situation that is critical to its ply massive. In future, communicationHighly-automated munication. driving The advantage is that DSRC ard will prevail in Europe for vehi- driving mode. It must interpret poten- between human drivers will haveOn motorways,to be is already cars independently fairly well developed perform drivingand is cle-to-vehicle communication. And that tial challenges and then make the right completely mirrored by ones andtasks zeros such – asused braking, in automated steering, toll changing systems, lanefor exor- could still become a problem. Because decision. Given the above, it should be including hand signals and otherovertaking. non-ver- ample.In certain It is situationstherefore athe proven driver technolo can di- the lack of an agreed standard also hin- clear that an autonomous car cannot de- bal communication. Think of somethingvert their attentiongy, although from notthe withroad. all If thea situation advantages can ders the second important requirement pend solely on a mobile phone network as simple as an overtaking manoeuvre:no longer beof thehandled new 5G automatically, V2X technology, the whichdriver inis- for comprehensive autonomous driv- for critical decisions since these are sys- human drivers pull out brieflyprompted before toclude take over.better reliability, lower latency and ing: the necessary network effects will tems that are never 100 per cent reliable overtaking and check whether the on- a higher range. be achieved only when a critical mass 4 – as we can still painfully see in Germany. coming lane is clear. Would we forgive an of vehicles is equipped with compatible The danger would be far too great that autonomous car for swerving inFully-automated this way? 5G brings driving convenience to the car short-range communication technolo- a vehicle would perform an emergency Doubtful. However, if the vehicleAt inthis front stage, One the thing computer is clear: system Vehicle-to-vehicle takes full con- gies. "Car manufacturers must therefore stop if it inadvertently entered a dead provides information to the othertrol that of themany communication applications and without no longer network needs tocov be- equip their vehicles with appropriate zone. If we were to rely on a nationwide road is clear, the following car monitored.no longer Iferage it is necessarywill initially to beleave the the decisive automated fac- communication options as soon as pos- 5G network as a prerequisite for auton- needs to pull out to check. Ormode, consider the systemtor in autonomousprompts the driverdriving to – takebut overthis sible. They must also configure them to omous driving, the dream of a self-driv- convenience: only when cars thecan vehiclecom- indoes good not time. mean that the 5G mobile net- send messages – such as the intention ing car would remain a dream for a long municate with each other or with traffic work will not have a role to play. With to change lanes – even if nobody can 5 time. "A 5G network alone will not be the lights and other infrastructure will coop- its greater range, it allows for a more receive the messages yet. This is the technical basis for autonomous driving," erative driving – in addition to purelyAutonomous au- comprehensive driving networking of all road only way to achieve a critical mass that says Thomas Luk, partner at Kearney and tomated driving – become possible.By 2025 And at theusers. earliest, Information cars will such be moving as up-to-date through will enable the autonomous vehicles expert on autonomous driving. this is crucial for of levels The five the future autonomous driving qualitytraffic of traf without- maps, drivers. the currentPeople trafficwill become situation passen and- of tomorrow to respond to these mes- fic. Experts describe all these gers;examples the vehicle urgent will warnings, take over as all well driving as coordinatfunctions.- sages – it's a classic network problem," Plentiful technology under the cryptic term V2X communiThen it will- ingno longerinformation be necessary on traffic to intervenemanagement in says Freyberg. But if 5G is not the all-important compo- cation (vehicle-to-everything communithe driving- process.can be exchanged. Coordinated driv- But while the United States and China nent, what is? First and foremost, tech- cation), meaning direct communication ing, such as clearing traffic jams, is also are already putting the necessary rules nical aids that are installed directly in between cars or between the car and conceivable in the long term. However, in place, Europe is still undecided. This the car (some of which are already in the infrastructure without needing to go 'edge computing' is needed in order for needs to change as soon as possible. use today) are more important: camer- through a mobile phone network. And the exchange of data via mobile radio Instead of constantly conjuring up the as that keep watch all around the car, ra- this is precisely where 5G as a technolo- to function quickly. The information is ostensible key role of a 5G network for dar sensors, or a lidar scanner that uses gy could come into play. Could. processed in the radio masts along the autonomous driving, all stakeholders laser beams for scanning instead of ra- Because there are many different route, not just in the control centre. The should join forces to agree on uniform, dio waves like in radar. The on-board technologies for this direct communi- advantage is that data transfer is quick- future-proof standards for vehicle com- computer uses the data obtained in cation – 5G is just one of them. "It is er. Even when it comes to installing new munication and bring them to the mar- this way to construct a virtual model of therefore more important to develop a software in the car, the mobile network ket – starting with car manufacturers, its surroundings and make its driving common standard for communication – makes more sense. Last but not least, it chip and device manufacturers, indus- decisions. "Cars will be aware of their at least within larger geographical are- opens up the chance to offer more lux- try bodies and state regulatory authori- environment and process the mass of as," says Axel Freyberg, partner at Kear- ury to travellers. In future, anyone want- ties, through to the major mobile phone information in a decision-based way," ney and telecommunications expert. ing to stream a film while driving would providers.

28 29 Revenue Source: Monster.com The IT sector is growing ... in billion euro Which channels Recruiting Trends 2019 When talking about a shortage of skilled workers, the term are companies The survey asked HR usually used is a 'war of talents'. This is because companies Turnover with ICT products and services and employment Jobs managers of the top 1000 growth in Germany in million are finding it increasingly difficult to attract qualified young using to generate companies and the top talent. The shortage of skilled workers is particularly notice- Source: Bitkom new hires 300 companies from the War of able in MINT occupations – i.e. in mathematics, IT, natural IT sector in Germany. sciences and technology. We have summarised a few key Recruiting: Candidate current studies on this matter for you. 2019 2020 comes to the company, (The figures given refer to the German market.) e.g. via a job advertise- TOP 1000 ment. companies Active sourcing: Company applies to the candidate talents 170 1.19 172 1.23 86 with an open position. +2 % +42,000 +1.5 % +39,000 Top employ- ers for engineering

Recruiting channels Recruiting IT Number of open positions Top The most ... yet there is companies in thousands graduates employers important job Languages, frameworks, and other a lack of experts technologies used Electrical & Companies finding that for IT factors for in companies 80 Information Technology there is a shortage of IT Office environment or company culture 7 specialists in % graduates software Number of IT positions to be filled 13 14 15 1. Siemens developers Flex time or a flexible schedule in the economy overall 1. Google Opportunities for professional development Figures in % 140 2. Daimler Remote work options 24 124 TOP 1000 2. Apple 120 companies Impact of work output 3. AUDI Source: Stack Overflow 100 3. Microsoft Developer Survey 2019, Industry 82 14 90,000 respondents, 32 4. BMW Group 80 worldwide Financial situation of the company 4. SAP Question: "Comparing 55 5. Tesla Department or team 60 51 two jobs with the same 43 43 compensation, benefits, 38 39 41 5. Amazon Diversity of the company 44 40 and location, which 28 IT 6. Porsche characteristics would 46 20 companies

most influence your 49 20 channels sourcing Active 6. BMW Group 54 choice between the two?" 20 7. Google 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 7. Daimler 8. Bosch

34 47 58 50 50 54 55 66 67 82 83 Group 8. Blizzard Entertainment Tech vs. automotive: Why and Source: Trendence Graduate Barometer 2019, Germany 9. Airbus Basis: 856 managing directors and HR managers in companies with three or more employees The survey asked >50,000 students and graduates in the (excluding agriculture and public sector); 2019 Two of the three where young professionals feel fields of economics, natural sciences, computer science 9. Porsche best suited and engineering. most sought-after 10. Deutsche jobs on LinkedIn Bahn 10. Bosch Proportion of OEMs and tech companies among the top 10 employers who meet the job factors listed below according to the survey. IT companies finding it difficult are IT jobs Group to fill 11. Fraunhofer- harder to fill vacancies impossible Top 3 search queries from re- 6 5 4 5 5 5 4 4 3 Gesellschaft 11. AUDI AG to fill cruiters on LinkedIn Figures in % Forecast 2030 Forecast 2030 12. VW 12. Siemens OEMS 2019 2019 DevOps 13. Lufthansa 13. IBM Engineer Technik 2 3 4 3 2 3 4 5 2 TOP 1000 41 IT Enterprise 14. BSI companies companies 43 46 43 1 Account 14. DLR TECH Executive 15. Fraunhofer- 63 57 15. Microsoft Gesellschaft 59 10 2 51 14 Frontend 16. Rohde & 13 20 Engineer 16. BND Innovation Fair salary Schwarz

Career prospects Work-life balance Status & prestige Source: Monster.com Recruiting Trends 2019 Source: Trendence Corporate success Source: Trendence Attractive work duties Employment security 3 Graduate Barometer Source: LinkedIn Talent Graduate Barometer Good management style The survey asked HR managers of the top 1000 companies and the 2019, Germany top 300 companies from the IT sector in Germany. Solutions, 2018 2019, Germany 18 19 Mobility means movement

BY MORITZ GAUDLITZ

What will the city of the future look freedom to go anywhere at any time. In like? How will we get about and what Berlin, for example, we have many oppor- role will cars play, if any? Mobility has tunities to get somewhere. For me, this is a been a constant fixture in all industries very important aspect of mobility. for years. New players are entering the market to give new impetus with their We are mobile. We want to reach our young and innovative ideas. In the first destination quickly, efficiently and, issue of Next Gen Talk, we talk to Kear- ideally, cheaply. Is this mobility or is it ney Principal Sabine Spittler, special- transport and what are the differences "I think it's important to say again: ist in automotive and digital, and Tom between these two terms? it won't work without significant Kirschbaum, CEO of the Berlin-based SS: I think mobility is the urge to move. involvement of the public sector – mobility company Door2Door, about It describes the need for freedom of mobility is an issue where policy new mobility approaches in cities. movement. Traffic is rather the result of goals play a major role." mobility. Door2Door aims to revolutionise urban public transport with its app. Before What are the biggest challenges in that happens, we're sitting at the com- your fields right now? How can we re- pany's Berlin headquarters and talking duce traffic through Mobility-as-a-Ser- about the future of mobility. What does vice, through platforms or through mobility mean for you now and also for digital solutions, while still ensuring the future? mobility? Tom Kirschbaum: I think you can feel TK: That's the big question that our just what mobility means right now. company has been tackling for about For me, mobility is one of the essen- ten years: how can we design mobility tial human freedoms. I believe that it is without ideology – without demonising an original characteristic of humans to individual means of transport – with- be in motion and to experience things. out increasing traffic density. Everyone This could be on your feet – in which knows the streets are too crowded in case you can cover a certain distance – the cities and the public transport gap or you can use certain other aids. Tak- is too great – that is why so many peo- en together, for me that is mobility. ple drive. In the past it somehow worked It's all about the tool that moves you. quite well. But now it's not only too full, It could be a car, a plane or any oth- it's also too dirty. Which is why we are er means of transport. What's particu- also concerned with the issue of emis- larly interesting is to consider 'Why is sions. And then there is stationary traf- there mobility?' fic, by which I mean all those cars just Sabine Spittler: I would agree with that. parked there. You could easily imagine Objectively speaking, mobility is how we other things in that space: playgrounds, get from A to B. Emotionally, it is also the terraces for bars, bicycle lanes.

32 33 Due to Covid-19, more and more peo- is to connect everything in an intelligent TK: Yes. I think it's important to say again: ple are getting back into their own way. In other words, to map the move- it won't work without significant involve- cars, traffic jams are getting longer, air ment profiles intermodally, from door to ment of the public sector – mobility is pollution is up, space is getting small- door. As far as I know, this is still a huge an issue where policy goals play a major er. Are there any solutions? challenge at the moment because none role. Because it is literally within the city TK: The trick is efficiency. We believe of the various data owners has an inter- authorities' power, this is usually a munic- that efficiency can be achieved by put- est in sharing their data freely. The ques- ipal issue. In every city, in every region, ting more people in a 'vessel', the vehicle tion then is where should it all come to- the appropriate mayor, the appropriate that transports people from A to B. Usu- gether? Who evaluates the data points district administrator has to consider: ally a car has just one passenger. That's and movement profiles in the interest of "How do I actually want my mobility to hugely inefficient. If we record the dif- citizens and society – and not just in the work here?" This makes it relatively diffi- ferent routes as a dataset, we see that interest of the shareholders of mobility cult, because it creates a very fragment- the individual movement patterns are providers such as Uber? This is relatively ed field. When it comes to mobility, there not that dissimilar. Quite the contrary. simple in concept, but extremely difficult is little else that can be done. In Vienna, People travel similar routes at simi- to implement in reality! Madrid or Copenhagen, mayors have al- lar times. So you can also put them in TK: Yes. It is extremely difficult to imple- ready said: "I want a car-free city centre a vessel. Of course, you might then ment because there are so many stand- at the end of my term of office" or "I want have to make small detours to pick peo- alone solutions. At Door2Door, we're to close the public transport gap in my ple up and drop them off, but you also currently making do with using data city." Of course, this is a clear message achieve considerable efficiency gains. I from telecommunications companies: we can work work with and then consid- am convinced that Covid-19 won't fun- they know how mobile phones move. er: "OK, how can that work?" damentally change this. For data protection reasons, however, SS: Yes, that's a good point. In the end SS: You've been doing ride-pooling for this data is always relatively coarse. Oth- you have to have a vision of what every a while now. So you provide the soft- erwise we could very quickly identify in- city should be like in the future. That's ware and infrastructure for businesses dividuals and their work routine. Little by one thing. But as you say, that's not the and public transport. What is your ex- little we're also using our own data from end of it. It's a very complicated process perience? With CleverShuttle there is our projects and transferring this to oth- of change and many people have to ven- now the Shuttle in Munich, the BVG's er regions, which works very well. ture into very unfamiliar, new domains. BerlKönig in Berlin ... such solutions are SS: Yes, but what you just described And in my opinion, those responsible already available. What do you think, shows that the data, even if you cannot must be led by the hand. how are these being used – especially break it down to the individual person, in combination with various multimod- is sufficient to analyse certain move- Are people generally prepared to use al elements such as Lime, Uber or taxis? ment patterns. So as you said, we can more than one mode of transport to get TK: In the cities they are the typical ear- see that certain clusters move in cer- from A to B efficiently? ly adopters: young, highly digital peo- tain directions, so we can pool them. SS: I believe that a great many people ple. If you go a bit further out from the I believe that the data pool for doing are willing to do so and are already do- metropolises, you will find older people this has already reached a point where ing so – perhaps without being aware among these users because mobility in there is a great gain in understanding. of it. For example, if you take the bus to rural areas is so problematic. In this re- But when it comes to the personalisa- the airport in the morning, fly to Munich spect, the potential covers the entire tion of mobility, we encounter limits. If and get on the tram there, you're using social spectrum. At the same time, it is we try to take as much as possible of three different means of transport, which also true that all the projects to date, the previous individuality of individ- is already a chain of intermodal mobility. even the BerlKönig in Berlin that has 100 ual road users and put it into the new Most people just don't perceive it like that vehicles, are far too small and sporadic mobility solutions, it all grinds to a halt because it's not as synchronised yet. You to make any real difference. In a city like because you don't have or can't and don't sit at home and say, "I want to go Berlin, you would need a number of ve- shouldn't have a sufficient data pool for from here to Marienplatz in Munich" and "I think the discussion of car versus hicles in four digits. After all, no one is this personalisation. then a system books the whole route for other vessels does not get to the heart going to give up their car permanent- you. If that were so, the perception and of the problem. Rather it's a question ly because a hundred BerlKönigs are Car companies are already working awareness of intermodality and intermod- of individual mobility versus shared cruising around all over Berlin. with city authorities. At the same time, al needs would probably be much greater. mobility." it seems difficult to get companies like In addition to good infrastructure and Uber or Lyft to cooperate with the Ber- To what extent can such intermodality the 'vessels', how important are users' lin transport authority (BVG) or the City work across Europe or across borders? data and movement profiles? If you had of Berlin. Do you tell your customers, TK: Our very first product – which is why those, it would be possible to solve all "Open up!" – or how do you do it? the company is also called 'Door2Door' problems, right? SS: We work closely with automotive – was the idea of a platform that works SS: Yes, technically speaking, the solu- companies and discuss how they them- from door to door throughout Europe. tion would not be especially difficult. Af- selves can work better with cities and We thought it would actually be quite ter all, we already use Google's maps in which concepts make sense. To be hon- cool to have a platform like that. This is many vessels today – whether in the car est, so far we have had relatively little still true; today we are working on map- or via the BVG app. These already collect cooperation with cities themselves in ping the door-to-door journey chains in movement profiles. I think the difficulty Germany. an urban setting.

34 35 When all sides are open and the differ- TK: But of course it's one of the real- for ride-pooling services. That is why, ent players harmonise – is that the ide- ly big technological changes, which is yes I believe, cars will continue to be an Publisher's details al situation? also incredibly fascinating. But it will important element in cities. But individ- SS: In the ideal case, yes, but I think take a long time. As for how exactly it ual mobility increasingly less so. that's unlikely. To orchestrate all this will change the world, nobody knows for TK: That's music to my ears, I won't ar- seems far removed from reality. At some certain. In this respect, a lot of different gue with that. First of all, it's true: in the point or another, however, there are cer- things have to be tried out. This is the past, shared journeys were also a social tainly partnerships between companies only way things can ever go in a certain happening. And we can see during our or even between the public sector and direction. And because it's all so com- journeys that this is still the case today. companies that make sense. plicated, there won't be just one person We have even been asked if we could in- TK: And a bit of competition doesn't who will say, "OK, I've got it now. I'll do- corporate a dating feature. I think the hurt either. It is also good when there ing it better than anyone else." I believe pendulum is swinging back a bit right Publisher Photos and illustrations are multiple fish in the pond all follow- it will remain a very heterogeneous envi- now, but of course there will still be A.T. Kearney GmbH Unless stated otherwise: Kearney ing different approaches, because no- ronment for many decades to come. room for the car. Driving a car is fun, af- Dreischeibenhaus 1 Cover: David Breun for Ramp Magazine; body knows everything. Nobody knows ter all. I drive old cars myself. So, I am 40211 Düsseldorf pp. 16–23: Editing by Claudia Klein, with exactly how all of this will work. Three, Let's end with a provocative question: someone who consciously emphasises Contact material from Kearney; p. 18: Sorin Morar, four years ago for example, there was a if we look back a hundred years, peo- this freedom of ideology. I don't want to Christian Malorny, Dr.-Ing. pp. 32–36: Enno Schramm; Back page: heavy emphasis on autonomous driving. ple travelled almost exclusively by bus live in an autocratic system where peo- Publisher and ddpimages/M.Gottschalk; Infographics: Back then Volkswagen's Chief Digital Of- or tram. That was a form of ride-pooling. ple are told exactly how to get from A Global Head Automotive Kearney Sebastian Struch ficer said that the Americans or Chinese And then came the car, which led to to- to B. Rather it should be fun, because it Charlottenstrasse 57 Lithography would be ready by 2020 and Volkswa- tal congestion of cities. Has the car had is faster and more convenient. But there 10117 Berlin Serum Network GmbH, Munich gen would be fully autonomous by 2022 its day and do we have to focus entirely are also many benefits to not being be- Telephone: +49 30 2066 0 Printing at the latest. I believed it too. I even bet on ride-pooling again instead? hind the wheel yourself. That is why it is [email protected] FIBO Druck- und Verlags GmbH, Munich a case of red wine and lost. SS: I think the discussion of car versus more a question of what makes people de.kearney.com SS: It's ridiculous! Such a radical change other vessels does not get to the heart happy. And the car has been a source of Legal responsibility for the content This publication and all articles and illus- for mobility, traffic and all other affected of the problem. Rather it's a question of great pleasure for a long time. However, Michael Scharfschwerdt trations contained herein are protected by social systems such as traffic rules, in- individual mobility versus shared mobil- due to urban overcrowding, it no longer Concept, editing, design copyright. Any use requires the consent of surance, and so on takes time. This is far ity. And the car, from a purely hardware makes as much sense at present. So the SZ Scala GmbH, Munich A.T. Kearney GmbH from being a matter merely of the feasi- standpoint, will certainly continue to pendulum is swinging back towards col- Dominik Wüchner (Editor), Moritz Gaudlitz bility of technological progress. play a role and probably remain relevant lective transport. (Editor), Ellen Verick (Art Director), Iryna © 2020, A.T. Kearney, GmbH. Baumbach (Senior Editor), Wolfgang Arzt All rights reserved (Proofreading)

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