The New Automotive Partnerships Landscape

In today’s shifting automotive climate, the need to collaborate with the competition for the greater good of the consumer is stronger than ever. It should come as no surprise that the main competition that traditional automotive manufacturers now face comes in the form of technology companies such as Samsung, Dyson and Google, who are not only innovating at an exponential rate, but are busy forging dynamic partnerships of their own.

It seems the race to get ahead in what is often referred to as ‘the second electrical revolution’ is on, and it doesn’t matter what type of company you are. Here we explore the various automotive partnerships that in our eyes, are on a collaborative road to success, and ask, what does this mean for the people marketing these brands?

1. Automotive with… Automotive

The sheer speed at which the world is adopting electric vehicles (EVs) is proof that the automotive industry is experiencing its biggest revolution in its 120-year existence. In the US during the first six months of 2019, over 110,000 electric vehicles were sold. Here in the UK, more than 27,000 plug-in vehicles were registered in the same period. Whilst these figures currently represent quite small percentages of the total cars sold, rapid change is happening, and with it, the establishment is having to change too.

Collaborating with one another is a sure-fire way for legacy automotive brands to share technological development costs and reduce production schedules for mutually beneficial outcomes. Whereas Tesla’s factories have been purpose-built to produce EVs, the likes of BMW, Honda and Ford are having to adapt legacy facilities to suit the new technology at huge cost, while also satisfying demand for petrol and diesel-engined vehicles that remain key sellers.

BMW and Jaguar Land Rover are one such case in point, recently announcing a partnership that would see the two companies jointly invest in research and development, engineering and procurement for the production of electric cars - allowing their customers to shift away from petrol and diesel cars, as more affordable EVs are brought to market quicker.

Jaguar Land Rover isn’t the only major competitor that BMW has managed to secure long-term partnerships with. Back in February 2019, it was announced that Daimler had agreed a “long-term strategic cooperation” around self-driving cars that will see the duo collaborating to bring new automated driving technology to market by the mid-2020s.

While more recently, Fiat Chrysler and Renault announced a proposal for a €33bn merger in a move that would create the world’s third-largest car maker behind Volkswagen and Toyota. The merger talks continue to this day.

As the JLR-Daimler collaboration proves, modern automotive partnerships aren’t necessarily exclusive to EVs, Toyota’s long-awaited Supra sports car - a halo model for the Japanese brand - was the result of close cooperation with BMW. And while many journalists have commented that the car lacks the inherent ‘feel’ of a Toyota from behind the wheel, they also comment that it’s a wildly competent and enjoyable sports car. For Toyota, it seems BMW’s expertise in producing performance cars is worth trading in the very traits that many sports car enthusiasts prize so highly.

So with the auto-industry landscape undoubtedly changing, and with the sheer number of new partnerships being created, whether that be in the interests of EV development or for range-topping combustion-engined sports cars, it would seem we’re headed towards a world where a relatively small number of super-brands will rule. What does this mean for marketers? Our own research into consumer attitudes towards electric vehicles - due to be published later this year - suggests that increasingly, brand heritage is becoming a less important differentiator in the choice of the car. Instead, consumers want to know more about the technological, environmental and entertainment features of each individual model - focusing on the driving experience and the external design, rather than what owning or driving a certain brand of car says about them.

It’s likely then, that marketers will have to move budget away from large, brand building campaigns and instead, we’ll see a shift toward more informative, practical product based content - as indeed we already have.

2. Automotive with… The Sharing Economy.

When Uber launched in 2011 the ability to hail a taxi became a whole lot easier and more cost effective. Fast forward to 2019 and the impact that ride-hailing apps have had is substantial. So much so, in fact, that traditional car makers are now partnering with technology and ride-hailing brands and even takeaway food companies as they develop electric and self-driving vehicles and explore new ways to attract business.

At the Consumer Electronics Show (CES) in Las Vegas in 2018, Toyota did just that; unveiling an autonomous vehicle involving an intriguing line-up of partners from Amazon to Uber to Pizza Hut. Akio Toyoda, Toyota’s president, told the Las Vegas crowd, “Our competitors no longer just make cars. Companies like Google, Apple and even Facebook are what I think about at night.”

GM invested $500 million in Uber’s main rival, ride-hailing company Lyft, in January 2016, an investment that looks likely to pay off sooner or later, given the company’s $2.157 billion revenue in 2018.

Another large player in the ride-hailing sphere is Google spin-off Waymo, which began as a Google Self-Driving Car Project in 2009. The company recently announced an exclusive partnership with Renault and Nissan to jointly research how commercial autonomous vehicles might work for passengers and packages in France and Japan. Waymo CEO John Krafcik, sees this as an opening to deploy commercial services not only in these two countries, but also possibly China and other countries. Waymo also holds a partnership with Jaguar Land Rover, following the launch of the I-PACE all-electric car, as the two companies work together to develop a self-driving version of the 2019 World Car of the Year.

And it seems that if the large car companies aren’t collaborating, they’re buying the smaller rivals out. A recent transaction by Ford, who paid $100 million for San Francisco-based electric scooter start-up Spin, proves that the number of collaborations, partnerships or buyouts with these kind of mobility and connectivity brands are set to rise.

Marketers should note that these partnerships again reflect the broader industry shift from brand ownership to product experience. Millennials simply aren’t as preoccupied with owning a car as previous generations, so in order to remain relevant to them, legacy automotive brands will need to align themselves with the behaviours and conveniences that this generation prioritise—if you haven’t seen Audi’s new electric scooter-cum skateboard, you need to check it out.

When it comes to the creation of content, the same premise applies on a micro level.

Marketers must create content that is connected to millennial culture, whether through influencer partnerships, innovative platforms or formats, or simply by providing answers relevant to the concerns of their audience—their brands’ impact on the environment being a key example.

3. Automotive with… Think Outside the Box-ers

At the very exclusive end of the automotive partnership spectrum, you have the rule breakers and the forward thinkers, who are collaborating to deliver really exciting innovations in the realm of tech, design and future mobility.

Legendary British sports car maker Lotus, now under the ownership of Chinese car maker Geely, recently partnered with the engineering arm of F1 brand Williams, in order to develop the powertrain for its exclusive new Evija all-electric hypercar. Delivering dramatic results, the Evija is set to be one of the fastest and most powerful cars in production.

Audi on the other hand, is also looking to push the envelope of automotive and mobility partnerships one step further, with an eye on taking to the skies! Collaborating with Italdesign and Airbus, the German car maker revealed its modular drone taxis concept known as ‘Pop.Up Next’ with live demos at Amsterdam Drone Week in November last year.

In what must be one of the most forward thinking collaborations currently existent in the automotive world, this hugely impressive flying taxi concept consists of a transportation module, designed by Italdesign, that can be put on wheels to drive as a little car, supplied by Audi, or attached to a drone, courtesy of Airbus, that is capable of lifting it off of the ground.

The idea is that you leave your house in the city by the module on wheels, functioning as an electric car, driving to a nearby heliport. Here the module and the vehicle detach as the drone lifts the module over the commuter traffic to another heliport outside of the city.

Then the module connects to another vehicle on wheels to complete the journey on the ground. It might seem like a fantastical idea now, but a working scale prototype was already operational, more than six months ago.

More recently, electric-specific global car company NIO, is taking a no less alternative approach to collaborations. In an attempt to appeal to an entirely new group of buyers, its latest pairing is with the leading global lifestyle brand for gamers, Razer. The first project in the partnership is the NIO ES6 Night Explorer Limited Edition Vehicle, which will make its debut at the 2019 ChinaJoy gaming expo at the Razer booth. Just 88 custom units of this vehicle are planned, which, according to NIO ‘fuse the outstanding performance of the NIO ES6 and the emblematic Razer colour palette’.

These are probably the most exciting partnerships of all, because they don’t just show us what the future of mobility could look like, they prove that it’s already here. Marketers must come to realise that ‘automotive’ as we once knew it is no longer an industry in and of itself. Mobility, in all its new guises is undoubtedly the future. And for us at Foxtrot Papa, that’s pretty exciting.

George Chapman is content strategist at Foxtrot Papa