How Car Companies Can Survive the Self-Driving Apocalypse

I know which carmakers will survive in a world of self-driving cars.

How do I know?

About fifteen years ago, I was a screenwriter. The gig lasted seven days, during which I was put up at the Chateau Marmont in the same bungalow in which John Belushi died. Horscht, the wild-eyed, fast-talking, curly-mulleted producer paying for it, had a vision he delivered to me as he stood in the doorway, silhouetted before the last sunlight I would see for a week:

Superhero movies are going to be big. Trust me. Everyone loved Stargate. Why? Time travel. Everyone loves time travel. You follow me? I nodded. And Nazis. Best bad guys ever. Everyone loves Nazis. You follow me? I nodded. Put them together and what do you get? I shrugged. Me neither, but I own the rights to make G.I. Joe: The Motion Picture, and you’re going to write it for me.

And that’s how I learned everything I need to know about the future of self-driving cars.

If autonomous cars, or self-driving cars, are the next big thing, how come no one can tell us exactly what they will be like? Because none of the automotive manufacturers have a clue. They don’t know what they’re selling. They’re showing teasers for a movie they haven’t made yet. The actors are hired. The sets are ready. What are they waiting for?

It’s not like they don’t already have 100-plus years of human behavior and thousands of car model histories to guide them.

I can answer that, but first, back to the Chateau Marmont: I had no problem coming up with a concept for G.I. Joe: The Motion Picture. I watched Stargate and The Producers three times each. I got into a time machine and read Save The Cat five years before it was officially published. One week and fourteen champagne bottles after Horscht locked me in, I was ready to pitch.

Impress me, he sneered.

“Stargate!” I blurted. “Everyone loves it. Why? Time travel. The plot can go anywhere. We can do anything.” Go on. “Nazis! Best bad guys ever. Everyone loves them, I mean hates them! Put them together and what do you get?” J’ecoute. “Wait for it…you get…G.I. JOE: NAZI STARGATE!” Proceed. “Nazis go back in time from April 1945 to change history and guarantee victory, and only the G.I Joe’s can stop them!”

Forget Simon & Garfunkel. You haven’t heard the sound of silence until you’ve pitched NAZI STARGATE.

I love it.

“Really?”

Yes. That is the greatest pitch I’ve ever heard. I’m sure there’s a market for it. Also…you’re fired.

What? What did I do wrong? I had done exactly what Horscht asked. Here’s what happened: I fell for the same focus-group-driven intellectual timidity that brought us the much-loathed Pontiac Aztek. Smart people signed off on that disaster because there was a market for Azteks. There still is. It’s not a big market, but it’s a market.

This is where car manufacturers have gone wrong.

Brand Dilution? You Ain’t Seen Nothin’ Yet

There are are two types of brands in automotive: Mobility brands and Driving brands. If Nazi Stargate didn’t offend you, this probably will. BMW, Mercedes, Porsche & Audi? Driving brands. Honda, Toyota & Hyundai? Mobility brands. Driving brands may make SUV’s, but that’s only to prevent people from buying functionally similar products from Mobility brands. The Land Cruiser customer of the ’80s now drives a Cayenne. Conversely, Mobility brands dabble in Driving products in order to satisfy customers who can’t afford a better car, which is why the fantastic Miata sells like hotcakes and the $400k LF-A was dead on arrival.

What is the one thing every manufacturer wants to get in on? Self-driving cars. Almost every manufacturer wants to be all things to all people. Hence, the Mercedes GL AMG and Grand Cherokee SRT-8. They treat Autonomous Driving (AD) tech as just one more package to be added to their product portfolio. If Merc can AMG-ify everything in their product mix with a straight face, trust me, they will also autonomize the AMG GT-S.

I’m not saying manufacturers shouldn’t offer AD in the future. They have to. They have no choice. People will expect it. But the inevitable ubiquity of AD will become context to a much bigger battle for the carmakers: the struggle to reassert and protect their “brand” in a world of functional similarity.

I’ve got bad news for Driving brands. Coming government regulation of AD will result in standardization of self-driving car behavior. Self-Driving cars will all drive at the same pace, following similar logic. Wall-E forever. The majority of Americans commute to and from work by car, on Interstates and secondary roads. This is where the majority of spirited driving occurs, and will no longer occur in an Autonomous future. A nice stiff M-car isn’t a fun place to be if you aren’t driving it. Especially if you know what it can do. So why buy one?

Ruh-roh.

Don’t Houseboat Me

My best friend Saul has my dream garage. A Porsche 993. A Ferrari 288 GTO. An Audi RS4. He’s tired of shifting. You know what else he’s tired of? Commuting. This is a blood-and-guts, balls out, fuck-you-gimme-more-power, Sunday-at-the-track car guy. Now he’s considering buying a Tesla. Not because it’s an EV, but because of Autopilot. Tesla’s Autopilot is as close to AD as you can buy today. All the Driving brands offer similar technology, but only the Model S allows autonomous steering beyond 30 seconds.

I’ve driven a Model S for nearly 40 minutes on Autopilot. Saul likes the idea of that. What he doesn’t like is the ride. (Too stiff.) And the interior. (Too spartan.) Too confined to truly relax. Would he buy an RS7 without the 30-second AD restriction? Probably not. He already owns cars optimized for driving. Why spend $100,000 on something he’s not going to really drive? If he’s not going to drive, he wants something comfortable. He wants a Mobility product.

Herein lies the irony of incorporating AD into Driving brands. It works best in the same places driving is most fun if there’s no traffic, and yet we spend most of our time in cars in traffic.

The more time people spend in Self-Driving Cars, the more comfortable they will want them to be, and the more they will be optimized for space, sleep and entertainment. They will become heavier, their weight distribution will change and their handling and performance will become…irrelevant. The more they are optimized for Mobility, the more difficult it will be for Driving brands to position them under the same umbrella.

Trapped in the Autonomous Closet

Mobility optimization won’t be a problem for Toyota, Honda or Hyundai. No one buys a Mobility brand today for the looks alone, and since, in the coming Autonomous World, no expects them to perform, they can evolve in shape, size and layout to conform with market demands without Brand Tension. The latter is the trap Driving brands must avoid if they want their brands retain any meaning at all.

AD will render most of the small sedans and every SUV/crossover manufactured by Driving brands utterly irrelevant. What will Mercedes stand for when the three-pointed star adorns a Wall-E bus? They won’t be able to move 5-person luxury pods on irrelevant performance specs. Sharing the badge and showroom floor with an AMG GT-S will make no sense. The more Driving brands try to sell Mobility, the more Mobility they will have to sell for survival, simultaneously diluting their brands in a cycle that will lead to M-brand roadboats.

This is where BMW has taken the wise first step of creating the ‘i’ brand. This is also where they’ve made the mistake of launching the i8 under what should be a pure Mobility brand. This is a wise hedge, but a foolish one. They seem to think the i brand should be about powertrain rather than lifestyle. In seeking to avoid brand tension, they’ve recreated it.

Mercedes and Audi should take heed.

What Car Manufacturers Must Do To Survive

There is a market for Nazi Stargate, but there’s a much bigger market for pure sci-fi and pure war movies. Just like the myriad different cars people will want in the future.

There will always be people who want to drive, but that number will decrease as a proportion of all cars. There will also be people who never want to drive again, and that number will increase as a proportion of all cars.

As a result, two distinct battles will unfold. The first will be among Driving brands fighting over the decreasing pool of people who not only want to drive themselves, but want to drive cars optimized for doing so. This is why Driving brands that want to survive should double down on their core customers.

Whereas BMW tried to hedge their bets with the i sub-brand, Mercedes might perform an end run by moving AMG up. Literally up. Above, out and separate from Mercedes, which would and should become a Mobility brand. Under such a plan, future AMGs would incorporate the entire suite of AD technologies—their layout and performance extrapolated from current designs—while Mercedes-branded pods could do battle with Lexus. Alternatively, or even additionally, Mercedes and the like could white-label for companies like Apple, Uber or Didi Dache. It’s not too late.

Mobility brands have an entirely different struggle coming, because they have literally no brand to protect in an Autonomous world of almost universally commoditized transportation. They will survive solely on volume and economies of scale. As a driving enthusiast, we can leave the pure mobility discussion for another article, with one exception. Mazda should split out “Miata” as a separate Driving brand. Think AMG, but for the people.

What will happen to car manufacturers who fail to understand and act on the coming realities? Mergers. Failure. Think Mercury. Oldsmobile. Pontiac. Saab.

Soichiro Honda himself once said: “…in the future there would only be half a dozen car companies.”

There are currently fourteen.

Why I’m An Optimist on the Future of Driving

My entire argument rests on the inevitability of Autonomous Driving, and both a decline in the availability of human driven cars and the freedom to drive them. Does this mean I’m bearish on the future for car enthusiasts?

Absolutely not.

Driving as we know it is making a comeback. Car sales are through the roof. Hundreds of millions of human-driven cars are on the road, with ever-increasing performance becoming more affordable every year. However much I believe in the Autonomotive Singularity, it will take decades for Self-Driving Cars to penetrate beyond first-world markets. Manufacturers have time. Not a lot of time, but time still. I don’t know whether my unborn kids will have the wealth of choices we have today, but human nature is hard to beat. As long as there’s a market for human-driven cars, someone will make them. There’s a reason turntable sales are up. Whomever focuses on authenticity will move iron like hotcakes. If you’ve ever delighted in exercising control over a car—the best mind-machine interface designed yet—you won’t give that up even for convenience’s sake.

It’s why Saul will never give up his 993, even if he buys a fully Self-Driving Car in the future. It’s why Porsche and Ferrari are forever. And Pagani. And Koenigsegg. And McLaren.

And Miatas.

I almost forgot. What Soichiro Honda actually said is that “…in the future there would be just half a dozen car companies. And Morgan.”

Honda was a pretty smart guy.

So we’ll always have that.

Alex Roy is the author of the LiveDriveRepeat blog and Editor-at-Large for The Drive.

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