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Indego / IndeGo Forum / Post-Geneva Show Thoughts

Post-Geneva Show Thoughts


Thursday, 27 March 2008 21:03

The Geneva Show was much as expected - a lot of emphasis on small cars and more environmentally friendly vehicles.  Most of the technology in the cars was evolutionary, but no less effective for that.  There were a number of "fuel cell" and "hybrid" concepts which owed more to the model maker than to any actual engineering.  Think were brave enough to have an outdoor stand where they were encouraging visitors to drive their electric City cars round a short course - hard!
However, I came away with the feeling that whilst there was interesting product on display, this is not going to be what defines the future of the auto industry.  This will be much more influenced by consumer behaviour- driven either by choice or regulation, and by infrastructure challenges such as the transport network (including but not limited to roads) and how we generate clean electricity - for battery recharging or hydrogen separation.  Great products - in the traditional sense - are of no value when congestion makes the whole driving experience intolerable.  Battery breakthroughs are a false dawn if the electricty to charge them comes from fossil fuel power stations.

Two things came to my attention recently which are relevant to the question of consumer behaviour.  The UK Government published the second part of the King Review on low-carbon cars as part of the Budget Process on March 12th.  Amongst the 40 recommendations was one which relates to making consumers more aware of the total lifetime running cost of cars at the point of sale.  This is to increase the awareness amongst consumers of the impact of their choice of vehicle on the environment by expressing this in monetary terms.  From work which I did on environmental issues whilst at A.T. Kearney, I know that consumers do not believe that their actions influence the global outcome, so I am not convinced that simply putting data in front of the consumer will work.  That was why part of an article in the Sunday Times last weekend on biofuels caught my eye.  Having concluded that biofuels are not a panacea, the final part of the article refers to another concept for the auto industry - the Hydro Car, developed by daredevil turned eco-warrior, Hugo Spowers.  His concept, orginally dubbed OSCar, includes not only the idea that you lease vehicles instead of buying them (as in IndeGo), but that this should include the price of fuel.

When we developed the IndeGo concept we put significant effort into looking at options to include fuel in the lease price, so that the price for the vehicle lease was truly the complete cost of your personal mobility.  We spoke to some of the major oil companies about this, and it has attractions to them, not least as a way of increasing customer loyalty, and the same principle would most likely also apply to hydrogen or electricity suppliers.  There are obviously practical issues related to how different usage patterns affect fuel usage, and we had ideas on how to address this within the "all inclusive" price model.  However, the biggest challenge was that the fuel cost was almost as much as all the other lease and operating costs put together.  The visual pricing of IndeGo with fuel would therefore look highly uncompetitive.

It suggests therefore that Professor King has a good point, but rather than relying on Goverment Wealth Warnings attached to your prospective new car, consumers should be forced to buy their fuel in advance at the same time.  Even three months would ram the message home - around £450/€570 difference if you choose a large SUV compared to a people carrier.  If the pre-payment was in the form of a fuel card, then oil companies might even compete for that business, in the same way that they do for the original fill of engine oil at the factory?  The King Review emphasied that consumer behaviour has the greatest potential short term benefit to carbon emissions from cars.  Making political gestures by focussing on a few thousand users of "Chelsea tractors" in London will not have any material difference - it is the millions of buyers of "ordinary" cars who need to be made aware that they can make the difference.

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