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A car has long been a tool of freedom. It allows an individual to reach any destination at anytime in whatever fashion desired. It’s a rite of passage and a sign of maturity and adulthood. So it’s no surprise, automakers have long directed its focus to the youngest demographic in hopes to instill brand loyalty as soon as possible.However, a new and unexpected opposition is endangering the market– the rising relevance and popularity of the smartphone.
Statistics from the Transportation Department noted that in 1978, 50 percent of 16-year-olds in the United States obtained their first driver’s license. By 2008, the number dropped to only 30 percent. According to Gartner’s lead automotive analyst, Thilo Koslowski, says, “Mobile devices, gadgets and the Internet are becoming must-have lifestyle products that convey status. In that sense these devices offer a degree of freedom and social reach that previously only the automobile offered.” As a matter of fact, Koslowski went as far as saying, “The iPhone is the Ford Mustang of today.”
Sheryl Connelly, Ford Motor Company’s manager of global consumer trends and futuring, continued, “The car used to be the signal of adulthood, of freedom… Now the signal into adulthood for teenagers is the smartphone.”
Connelly explained that driving a car may limit the valuable time a teenager could have used to text their friends our update their statuses. While public transportation is slower, it will still provide teenagers time to engage friends on their mobile device. Yet, Ford is undeterred. K. Venkatesh Prasad, Ford’s senior technical leader of open innovation, responded with, “We are not looking at this to ask how we can get teens to buy a car versus an iPhone. Instead, the car has to become more than just a car. It has to become an experience.”
What that means for Ford is to create cars that can better mesh with a teenager or a young adult’s life by making them more like smartphones– cars that could automatically check in on FourSquare when it arrives at a trendy hangout spot, read text messages aloud, and built in cameras to take profile pictures and videos for the passengers so that they can upload their experiences onto Facebook or YouTube. Shared music networks can be implemented on inboard infotainment systems as well.
Unfortunately, it seems as if sheer driving pleasure and the significance of mobility has been lost to the new generation. A scary thought, but soon a car could even navigate itself so that the teenager could give social networking its undivided attention.
[Source: New York Times]
After Volkswagen found themselves briefly at the top of the industry during Toyota’s recall fiasco, it seems that they’ve grown fond of the achievement and aim to legitimately take over the top spot in the future.
Volkswagen will invest 62.4 billion Euros ($86 billion) across a five year span for this endeavor. According to CEO Martin Winterkorn, “The Volkswagen Group is investing a record amount in forward-looking projects to achieve its goal of becoming the world’s best automobile manufacturer… Top of the agenda for us are investments in environmentally friendly, sustainable models and drives.”
On top of the 62.4 billion investment, another 14 billion Euros will be invested through 2016 exclusively for VW’s Chinese ventures– Shanghai-Volkswagen Automotive and FAW-Volkswagen Automotive. The investment is intended to add at least two more manufacturing plants in China.
As Volkswagen projects their growth in China to reach 2.4 million units sold, Winterkorn wants to make sure that Volkswagen will have the facility to meet demand.
Moreover, Volkswagen has recently opened a plant in Chattanooga, Tennessee specifically designed to accommodate an American Market specific Volkswagen Passat.
The needs for Russian expansion are recognized as well.
After a dismal 2009 , American automakers look set to gain market share in 2010, despite fewer brands, a drastically reduced dealer network. The last time the Big 3 gained market share was in 1995.
The strong profitability of the domestic automakers has been linked to lower manufacturing costs, a reduced debt load and careful use of incentives. Import brands like Hyundai and Subaru also fared well, while stalwarts like Toyota ended up losing market share. Analysts expect overall U.S. sales volume to hit 11.5 million vehicles in 2010, an improvement of 1.1 million over 2009. Projections for 2011 were not available at this time, but the Big Three are expected to gain even more momentum as all-new product finally hits the market.
[Source: Detroit News]