What Does Covid-19 Mean for the Automotive Industry?

Exclusive interview with automotive consultant Timo Nührich

We were recently inspired by the interview with Daimler/Mercedes Benz CEO, Ola Källenius, about how this large automotive company is navigating the COVID-19 crisis.

It got us thinking: what does this mean for the whole industry? Most mobility companies are massively affected by the crisis. Is it time for these companies to re-invent now? Or is the coronavirus simply a small push in a new direction?

We decided to ask an expert from the automotive industry to help us answer these questions and give us an insight into their learnings from the crisis.

Timo Nührich is the Co-Founder and former CEO of the mobility startup MILES. It’s an app that allows you to rent different types of cars and pay per mile, instead of minute.

Timo is an automotive consultant with more than 13 years of experience in the industry and he has worked in various roles at Peugeot, Toyota and Audi.

Picture: Timo Nührich

aware_The Platform: Do you think the COVID-19 crisis will drive faster change within the automotive industry?

Timo Nührich: The worldwide crisis as a result of the COVID-19 pandemic will definitely change the automotive industry. The longer the restrictions will last, the bigger and more sustainable the impacts and modifications will be. Nevertheless, it is going to be rather an evolution than a revolution. Why? All winning trends that are going to prevail have already been there before the crisis. But the current pressure on the industry and need for change, will accelerate these trends.

Tomorrow’s competition is not taking place within the old economy. Mercedes’ biggest rival is not BMW. The most important competitors for the German OEMs will remain the new players from the tech scene. The winners will be Tesla, Google, Apple, Uber and all the other companies with a truly tech-based DNA.
From a German perspective, the bad news is that the most innovative protagonists are coming from other countries, predominantly from the United States.

aware_The Platform: What are some lessons the automotive industry has learned from COVID-19 already?

Timo Nührich: From my perspective it’s important to look at the different fields within the diverse automotive industry rather than at the whole branch. There will be winners and losers. First of all, the mindset of the company is crucial.

  • Does the company understand how to adapt

  • Does the company have a digital mindset?

  • Is the company able to attract the best talents on the market?

These requirements and survival skills are more important than ever to adapt to our fast-changing environment.

The big OEMs like Volkswagen and Daimler are facing hard times. Digital business models are software based and this is not the core competence of the old economy. Tesla is much ahead, which has also been confirmed by Volkswagen boss Herbert Diess a few days ago.

Some major cities like Brussels and Milan have already announced that they are going to change some regulations regarding the traffic. The crisis has taught us in a remarkable manner what the positive effects are of having less cars within cities.

E-mobility might be another winner, unless politics will continue to protect and support the German industry, for example by funding combustion engine vehicles.

aware_The Platform: And how is the crisis affecting the sharing economy?

Timo Nührich: For the sharing economy the situation might be different. There are trends that both accelerate and hamper these players. Unsecure times support less capital-intensive means of transport, but more remote work means less demand for mobility in general. Car ownership could dwindle in importance. However, it is not yet decided if this will boost carsharing and other new car related business models like subscription services or healthy and inexpensive modes of transport like bikes.

aware_The Platform: Do you think these learnings could help you to evolve faster, and adapt to modern trends and technology?

Timo Nührich: The learnings from the COVID-19 crisis will absolutely help us to realize the need of evolving and adapting fast, since customers’ needs can change from one day to the other. In my opinion the ability of fast change is all about mindset. This challenging time will show us who is able to adapt in the required time and to what extent.
Innovation is essential for the survival of any company.

Actions in response to COVID-19 will decide what the future holds for both traditional automotive brands like Volkswagen, Daimler and BMW, as well as ride sharing platforms like Miles and Uber. All are affected and all of them need to innovate.

by Lena Schrum

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