Making Cars Cool Again

On Monday, September 11, 2017Category: Ludovic Subran
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car-on-bridge-near-dam. Photo by Raphaël Biscaldi on Unsplash.png


​Last year, a colleague of mine went twice to the Paris Motor Show. The first time, as an industry expert, he was invited along with the press to discover the brand new models - before the show even started. He came back to the office with stars in his eyes: the electric car was the star of the event and finally making it to the center stage. Skeptics and cynics could crawl back into the hole they came from - me included! The second time, a week after, he took his wife to see the concept cars. Yet, he could only show her humongous SUVs which had replaced the edgy electric vehicles. 

That was a year after the Dieselgate. 

This year, in Frankfurt, at the International Motor Show, car lovers may be a bit antsy. After a record year for car sales in 2016, the market is still growing, in sync with the economic recovery, but the US, the UK and China are disappointing. Families prefer affordable second-hand cars, and the end of tax breaks, and rising interest rates make it harder to invest in a car. If you add to this a series of bad news and scandals, spin doctors should hold their annual convention in a location nearby.

The industry is doing OK. They are just having a hard time squaring the circle. Their customers are asking for the moon, or as we say in French, a five-legged sheep. They want their auto to be connected, green, fast, cheap and cool. They want a different experience altogether. They may not even know what they want. 

In the meantime assembly lines have to get ready. The industry is in Renaissance mode and it is quite bewildering, for everyone. Not a day goes by without a new report about the car of the future: your AI-driven, self-parking, and always heated ride; your fast-charging, fast-going, fast-everything machine; Hyperloop, hyper car, hyper-almost-transportation-like knight-rider. Cars in James Bond movies look so cheap compared to what these reports promise.

Let’s make a pit stop. 

In our auto world championship report, car makers have to compete for sales, profits, green technology and innovation at the same time. Pole position is no guarantee for success. Agility and speed matter but are no conditions for success. However, tough decisions have to be made and it looks like car manufacturers have spent more money and time on new mobility services and technology upgrades to make cars cool again. They have invested less in changing the engines or the infrastructure around it. Public subsidies continue to be the main driver for electric vehicles – not climate consciousness, but the grid is massively underinvested. In the end, the experience is what matters. Innovation is important but not disruptive enough to make all the promises come true. 

What a hard awakening it’ll be when in five years from now we’d still be complaining about too elitist electric cars. Easier (robotized) driving will be a small consolation prize. It is time to really move up a gear if we want to make cars great again.

In the meantime, let the auto world championship begin.

Ludovic Subran 

Chief Economist 

Euler Hermes 

If you would like to learn more about Euler Hermes in your country or near you, feel free to visit our countries’ pages.

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