Car- hailing apps force Toyoto to rethink plan
Carmaker plans to develop on- demand network of self- driving cars
Tokyo, Feb. 10: When Toyota Motor looked to the future at the turn of the millennium and aimed its new, edgy Scion small- car brand at twenty- somethings, it could not have guessed that the model would be dead after just 12 years.
In killing off the brand last week, the Japanese company was responding to the changing habits of millennials - those born in the 1980s, 90s and 2000s - who are reshaping the traditional model of car ownership. “Surveys we do tell us young buyers are less interested in owning cars,” one of those behind the Scion brand told Reuters.
“They either don’t have the financial leeway or they’re substituting car ownership with ride- sharing or car- hailing services like Uber,” he said, adding Toyota would redirect its Scion resources to its Toyota and Lexus models.
Faced with the demographics of a ‘ sharing economy’ and a generation that is — very broadly — still living at home with their parents, juggling debts and marrying later, the auto industry is having to shift gear to respond. Also, technology companies such as Apple, Alphabet and Uber are muscling in to control cars of the future.
In the biggest Detroit-Silicon Valley crossover deal to date, General Motors is investing $ 500 million in Lyft, a privatelyowned ride- hailing service in the US, and plans to develop an on- demand network of self- driving cars.
Others are responding, too, to the disruptive waves from technology and tech- savvy millennials, who increasingly want their cars to be as connected as their homes.
At the recent Consumer Electronics Show in Las Vegas, Toyota and Ford said they will adopt the same SmartDeviceLink software to link smartphone apps to car dashboard screens, and invited other automakers to join them. Toyota is also exploring its own ridesharing business model, designing smaller, easier to maneuver i- Road vehicles, which could be used specifically for city carsharing services.
The marketing chief of one Asian automaker said the changes prompted by ride- hailing and car- sharing services were a major factor in his firm’s recent move to overhaul its premium brand strategy.
As these apps and services gain traction, more households are likely to limit themselves to just one car, said the executive.