How Startups Are Preemptively Changing the Auto Industry | The Garage Group

How Startups Are Preemptively Changing the Auto Industry

The auto industry experienced substantial growth in the early 20th century when Henry Ford found a way to make the mass production of automobiles more agile and efficient. Innovation happens when consumer needs are married with possibilities, and Ford’s innovative solution was successful because he understood the root of the problem (the current solution wasn’t fast enough) and married it with the possibilities of solving the problem (technological advancements).

From the 1920s to the 1960s, engines grew and cars got faster, louder and more beautiful. Presently defunct brands like Plymouth, Pontiac, AMC, and Willy’s all flourished, meeting consumers’ needs for utility, cost efficiency and luxury. Inventions like the headlight, the turn signal and the windshield wiper entered the scene quickly as autos became a large part of daily life.

This icon of American culture hit its first roadblock in the 1970s. The Oil Embargo of 1973 resulted in a massive shortage of oil in America and forced the industry to change its thinking. The shortage was an awakening for policymakers, and it charted the course of auto innovation toward environmental protection and fuel economy. The 70s gave rise to emission standards, fuel economy standards and effectively killed American “muscle” with the regulation of the carburetor in 1973. The trend from the 70s until the late 2000s seemed to be something along the lines of “working to get more efficient.” Sure, there were new inventions, but nothing radically changed.

For the most part, the last 45+ years of the American auto industry has been constrained by rising fuel costs and consumer demand for fuel-efficient vehicles. Foreign cars got smaller and lighter, and people more readily purchased efficient cars manufactured overseas. The exception was everyone’s favorite giant, The Hummer, which would become a caricature for the events and mismanagement leading to the collapse of the industry and eventual bailout in 2008. The collapse, in short, was caused by corporate inability to change quickly and truly match consumer need for fuel efficiency.

Since then, corporations have caught on for the most part and have been working to up those MPGs. But auto industry innovation is starting to rapidly reach beyond fuel economy. Although the need for fuel efficiency still exists, companies are finding ways to marry that specific consumer need with new possibilities, just as Henry Ford did in the beginning. In the past few years, three substantial innovations have started to change the pace of change in the industry and promise a far greater vision for innovation than the lackluster attempt at advanced fuel economy we’ve seen over the past 45+ years:

In 2008, when the auto industry was in shambles, it was not easy to imagine hailing an autonomous electric vehicle from your phone, having it pick you up, and take you anywhere you needed. That future case is not that hard to imagine, thanks to the startups that were able to look at an industry and decide to innovate outside the traditional efficiency trend.

These next few decades in the auto industry will be shaped by advancements in mobile technology, machine learning, AI and 3D printing. All of these technological advancements will impact tangential industries as well, perhaps in ways even more exciting than the auto industry. The auto industry is no longer limited to the confines of building a more efficient combustion engine.

Are you thinking about future tech and how it can/will impact your industry? One lesson we can learn from the auto industry is that when significant change occurs, it is hard for the traditional players to catch up without drastically changing the way they think. Henry Ford once famously said, “If I had asked my customers what they wanted, they would have said a faster horse.” How can you merge current consumer needs with possibilities in the way that Ford did so many years ago? Start by asking yourself these three questions:

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Photo credit: Unsplash user Benjamin Child

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