Is the internet slowly strangling the car industry?

This might seem like a strange topic to write about, given that I now earn my living writing about a car company on the internet, but sometimes you’ve just got to roll with these things when they come to you.

Last week, here in Australia, we had our biggest horse race of the year: The Melbourne Cup. It’s referred to as ‘The Race That Stops The Nation’ and it’s no mere boast. All around the country, workplaces grind to a halt at 3pm to watch the 24 nags run the 2-mile course. For the bookies, it’s the biggest betting day of the year. At Flemington racecourse itself, well over 100,000 people cram themselves in, dressed to the nines and gulping down chicken and champagne for breakfast, then just champagne for the rest of the day’s meals.

The event is almost as much about fashion these days as it is about horseflesh. If your idea of entertainment is seeing a flock of loaded, but very well dressed women sitting in a gutter, shoes-off and dishevelled, head down to Flemington around 6pm during the Spring Racing Carnival. It’s surprisingly entertaining, but back to the race……

I joined in and watched The Cup on television. I didn’t have any money invested, but you want to be able to talk intelligently about the race when one of your friends calls or emails you to tell you about his/her winnings.

Something that I saw on the TV coverage really made me sit up and take notice. After the race, the winning horse was brought to the presentation area along a path going right through the crowd. As I watched this, it struck me how many people were holding up their smartphones. The crowd wasn’t a huge wall of cheering suits and frocks as you might imagine. It was a wall of raised arms and gadgets, with everyone watching the magnificent animal that was little more than six feet in front of them through a tiny 3-inch screen. This photo doesn’t quite do it justice, but you’ll get the impression.

Photo: The Age

I saw this video earlier today, and it reminded me of the Melbourne Cup scene and the way instant communications and social media have changed the way we live. It’s a US comedian named Louis CK talking about his Twitter account (less than 2 minutes, but funny and quite true):

The point, and the question(s):

Has our recent obsession with ‘connection’ and gadgetry reduced our aspiration for actual experience? And has the market for providing that instant connection taken precedence over the experience/product it’s covering?

I had my first car for three months before I was legally allowed to get my licence and I sat my driving test on my birthday. I couldn’t wait to get out on the roads. The younger two of my three stepkids are boys and both were content to grab lifts for absolutely ages after they reached driving age. When I was at driving age, the most sophisticated piece of technology I owned was a Walkman. They both had laptops.

Despite what my three stepkids might think, I’m not an old man. I’m 41 years of age and whilst my body feels every bit of it (regretfully), my mind still thinks it’s 21. Perhaps I’m stuck back in 1991?

It doesn’t seem that long ago, however, that owning and driving a car was still a very aspirational experience for a young man. It really was a ticket to freedom. Every weekend was a road trip and the destination was of secondary importance. It was the journey and the fun along the way that made many of those trips memorable.

Nowadays, a lot of people seem to look up the destination on Expedia, flickr through a few images and then grunt “meh” before getting back on to Facebook where they can share some more ROFL’s about the latest meme. (And by the way, if that last sentence made sense to you, turn off your computer now and go for a drive – NOW!).

So what of the way we get our vehicle information in the modern age?

The internet has created whole new industries on its own. Imagine how crowded the lines at the saltmines would be of there were no digital jobs. No CSS programmers, no web hosting companies, no smartphone designers, no software or hardware engineers, no database gurus, no bloggers (!), and no big demand for bits of blue cable.

The internet has certainly opened up new and fantastic opportunities for all sorts of people. With internet options for rural areas now widely available, almost anyone can get online. Not only that, singular people have shaken entire industries with the power of the net. There’s no doubt that it has changed the way companies in many different sectors share information about their business and connect with their customers. Overall, that’s probably been a good thing, but it can also be a cause for concern.

Somewhere in the world, there’s a fat guy sitting at a computer in his y-fronts making a very substantial income from a product or service he doesn’t really know that much about – simply because he knows a) that it’s trending, and b) how to get a high search engine ranking.

The web is full of ‘Presidents’ and ‘COO’s of entities that are little more than ones and zeros. The number of websites providing ‘the #1 industry analysis’ is staggering. All of them provide an opinion, whether it’s worthwhile reading or not is inconsequential. It’s there and it has an audience. For the people making the product that they’re talking about, it’s another element of noise that has to be considered.

As a real company, staffed by real people and (under normal circumstances) manufacturing a real product, Saab are having to deal with this modern phenomenon like every other carmaker. Our customers have changed. Their interests and behaviours have changed and they keep changing quickly, too. If we were to commission a customer study today, there would likely be several new generations of technology that people are engaged with by the time we got a chance to read the eventual report.

The web has changed the way you find information. It’s changed the way you shop for a car, the way you compare prospective purchases. By default, it has to change the way we package and market a car. It has to change the way we provide information about our company and our products.

And that right there is the big challenge for us and others like us. I know that Saab people are engaged online and are still very interested in our cars. I know there are other people who aren’t Saab owners, who maybe aren’t even aware of the brand and who could be interested in our cars. Can we react effectively to the way they now engage online? Can we reach them in the places they hang out or is our brand going to be overtaken by those who write about us, instead of being shaped by our own online presence? How can we make the vehicles that we sell aspirational again in front of an audience that doesn’t get out and experience quite as much as its forbears?

Is the internet slowly strangling the car industry?

Probably not. People still need cars and many of them still want certain attributes and values in the second most expensive asset they buy in their lifetime. But it has changed the landscape in which cars are sold and the market that we have to reach. It’s changed our customers’ aspirations and behaviour and that’s something that’s only going to continue to evolve. It’s something that’s interesting, a little scary, and very challenging all at the same time.

Enough from me. Now go get in your car and give it a good flogging through the twisties!!

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  1. Some good food for thought coming up on IS Swade! I’m enjoying these posts, though not sure what to do with them… but they’ll likely roll around in my head for some time.

  2. Being a part-time blogger, I’m part of the internet 2.0 When it started, people said it was like bringing democracy to information. It has never been this way, and it will never be.

    And it is not only the car industry that will suffer from that, any other producing industries are suffering the fact, that it is to easy to spread rumours, and nobody will listen to the real story an hour later.

    To be honest, in 1992 the internet was a better place. 8)

  3. Melbourne Cup?  Surely, Steven, it’s no match for the AFL Grand Final.  😉

    I’m a few years older than you but I’m certain you remember when new car shopping involved going to the various dealers, coming home with the glossy brochures, and poring over the photos and specifications.  You also looked for the auto magazines that reviewed the cars that held your interest.  With the Internet it’s much easier to sift through the specs online and narrow down your choices, but I’m not so sure it’s as much of an adventure as it used to be.

    That being said, used car shopping has been transformed by the Internet.  Having access to the info online through Edmunds, Kelly’s Blue Book, and the various enthusiast forums makes it easy to discover the joys and potential pitfalls of vehicles that interest you.  Sales outlets like eBay, AutoTrader, CraigsList, CarMax, etc., help you find a car out of your region that still might be worth pursuing.

    Overall, I’ll take the Internet model for car shopping of any kind.  After all, it’s allowed me to make friends all over the world with people like you.

  4. Oh and BTW, seeing pics on the news of a nicely dressed drunk blonde lady being restrained by police on the Flemington railway platform after last years race was definitely entertaining.

  5. The Internet will certainly change the car industry and I think it will open up incredible opportunities for a small niche manufacturer such as SAAB. The challenge is to recognize the opportunity and be able to act on it. Just imagine what would happen if the sales moved to the Internet? Suddenly it would not matter how many resellers you have, it would be just as easy to buy a SAAB as buying a Toyota. There is also a trend towards multi-brand service and repair companies. Again – not more difficult to service a SAAB than a Toyota. Parts can now be shipped to any place around the world in just days, again a big benefit for a small brand. As the car market matures around the word consumers want to be more individualistic, again a trend in SAABs direction.

    How will SAAB play it cards to take advantage of these trends?

  6. There’s more to this shift than just the internet. Insurance has gone up above inflation every one of the 25 years that I’ve been driving (I’m about the same age as you). Paying for insurance used to be an afterthought; it’s now more expensive than a used car. That’s serious change, and I sympathize with younger drivers who can’t run a car.

    On the other hand, the internet is a good thing for niche brands such as Saab. There’s lots of information available now that was hard to get in the past. Sure, most is uninformed opinion, but there’s also service manuals, parts catalogs, real owners, etc…

    What can Saab do?
    Don’t fight it. Don’t lock-in users. IQon is a great move, but why aren’t the aforementioned parts catalogs and service manuals online (and linked to dealers’ sites so I can order genuine parts)? Why is it that only dealers can read service codes? Why do I have to “upgrade” my entire car to listen to MP3s? Why can’t I search for a manual 9-5 in red or green on

    Don’t pretend that you can sell a car that doesn’t know about the kid’s soccer game on Thursday, the freezing rain up ahead, or where to find a wet-dry vacuum at two o’clock in the morning. The internet generation doesn’t want to hear excuses.

    All of these points add-up to basic internet-era functionality. Some may argue that “nobody does that right now,” but nobody sold a touch-screen phone five years ago… Being ahead of the game counts for a lot, because customers won’t buy unconnected cars once they’ve seen the future.

    1. You have a good point, but your concluding line is flawed. Belonging to the internet generation myself I still won’t buy a connected car in the foreseeable future – I simply can’t afford it, used cars is my only option.

      And older, wealthier people probably won’t buy it either. Those who are not flat out afraid of new technology are still very likely to don’t see the point of it, and even if they do, they won’t value it that highly.

      In the end, a lot of people will rather buy a perfectly normal car instead of one that makes good use of an internet connection.

      So who would buy such a car? Well, except for the older audience valuing safety and comfort, I’d say it’s the classic Saab audience. Not old, not young, but middle-aged people with reasonably good economies and a love for things that are a little special.

      I would say that “Nobody does that right now” is the perfect argument for Saab to do it.

      1. Would you buy a phone that’s not internet-connected?

        Cost shouldn’t be a deterrent once Saab starts shipping their IQon (Android) interface. The extra features are all software (provided the internet connection goes through your Bluetooth phone), and most of that already exists (Google calendar, etc). The hard part is putting it all together in a way that doesn’t suck.

        Also, given the fact that Saab has had only a few distinct radio/SID interfaces in the past 20 years, it wouldn’t be too difficult to sell a kit for used cars.

        1. Would I buy a phone without an Internet connection? No.

          Does your question imply a second one, i.e., would you then buy a car without Inzernet connection. If that’s correct, my answer is: absolutely. Why? Because I have my phone with me all the time. And I am not inclined having to look after upgrading and learning yet another device. That is why I also decided to buy my next car without built-in navigation system. There’s an app for that on my phone.

          IQon, as nice as it is, neglects the thinking if the internet generation. They want their data on a single device, or at least synchronised.

          It would be much better if Saab simply offered diverse tablet/phone mounts that could connect the car with said device, including car data and GPS position data transfer.

          1. Thylmuc,

            I think you’re not seeing the full level of integration that’s possible.

            Don’t think of the car’s display as another device, it’s an extension of your current device, with a better screen.
            There’s no reason why the interface should be much different from your current phone, and why it shouldn’t switch to your spouse’s phone’s interface when s/he is driving.

            As such, the car should be able to pull your calendar out of your phone (or out of the cloud using the logon that’s stored on your phone), associate meetings with mapped locations, weather info, parking info, etc. It should also have access to your music library, your contacts, your preferred mapping provider. No need to take the phone out of your pocket and attach it to a plastic bracket, blocking the heater vent and forcing you to use a tiny screen at arm’s length.

            Some of this already exists in Bluetooth interfaces, but most of it does not.

            Here’s what I envision: you download a Saab App for Android, BlackBerry, iOS, whatever, onto your phone, pair it to your car. You can choose a level of security that’s warranted (your phone and key are your ID, or you need to enter a PIN, or a fingerprint, or pick an icon from a group of 24). That’s it. At that point, the car knows how you like your mirrors to be adjusted, where you’re going (if it’s in your calendar), what cabin temperature you prefer, and what temperature you want in your house the moment you get home (no sense heating/cooling an empty house if you’re 30 minutes away at a cafe).

            You can also turn all of that off and just drive. Your choice.

          2. Read my last paragraph 😉 I am absolutely with you, the only difference being that I want a device not fixedly mounted in the car, but attachable thereto. That is actually what you say in your “vision” paragraph by “onto your phone”. Right! Onto my phone, not onto an Android device in the car. The car needs a controller itself, of course, that will interact with the phone/tablet, but without yet another touch screen, yet another GUI, and yet another need for constant updates and data synchronising. This does not preclude a creen in the car that is able to display information from the phone; I just want to avoid the need for duplicating apps/information.

  7. I like to drive my SAAB , it’s where I decompress , No radio, no internet , a Map / Atlas and off I go I don’t care for any distraction . I carry a cell fone but that is for safety not  to connect . That is what I 1st loved about a SAAB , the way it drives and still do to this day . However thats just me were all differant . 

  8. Interesting points! When you started the article, I actually thought you were up to something differently. Here it is: how will the next generation value cars at all? Will they still be a status symbol in line with bigger is better. Or will the younger ones prefer a well equipped and stylish Fiat 500 over a vanilla 9-5? I see strong indications for that happening.

    And Saab is not in a good position for such a future.