Sohu.com is a leading internet brand in China, providing online games and news to over 400 million people with revenues of over $1 Billion in 2013. In a recent conversation I had with Charles Zhang, the thoughtful and humble CEO/Founder of Sohu.com, he commented that internet companies will be eventually building cars. Internet companies building cars? Although this does not seem obvious, the idea of Charles Zhang is to take the efficiency and power of information provided by the internet to understand what the Chinese consumer really wants in an automobile. This allows Sohu.com to build cars that are tailored specifically to the Chinese consumer. Although this makes sense, the other side of the power of the internet is actually the dramatic reduction in the need to purchase an automobile in the first place.
Peter Diamandis (founder of the X prize) in his book “Abundance” uses the term “demonetzation” and “dematerializing” as a way to describe what is happening as the internet, mobility and location technology touch different industries. Take the humble mobile phone which has replaced (for most people) the need for land-line telephones, cameras, physical books etc. With each replacement comes a “dematerializing” effect where whole industries are replaced.
Similarly, the automobile industry is now feeling the effect of the power of the internet, mobility and location technology. In fact, most auto companies are now envisioning a future where selling a car is not about the car at all…its about how to give the consumer a better experience while traveling IN the car. Nissan’s CEO Carlos Ghosn commented recently in January 2014 that “we are moving from the car being a slave to becoming a partner”. Toyota designers are pondering the question of how to make the time in the car the most valuable part of your day. General Motor’s recently created a position of “Senior VP Customer Experience” with their philosophy being the product is not the car anymore, the car is the container of the experience. Ford is focusing on Infotainment for the car and their tagline is to deliver cars that are “safe, green and smart”. The pattern is clear and the auto industry is heading towards a future of the “conscious car”.
So how will the internet, mobility and location transform the automobile industry? Well if Google is any indication the shift has already started. Google heavily invests in mapping technology through Google Maps, it’s a leader in autonomous vehicle technologies, has a mobile phone OS through Android and recently purchased a company called Waze (which does crowdsourced traffic updates). All this technology allows us to be more efficient with the modern day automobile. No longer do you need to buy a car… maybe you can use it less, share it or get one only when needed because you are a lot more efficient through the use of these technologies. This is the “dematerializing” effect that technology will have on the auto industry…a lot less cars and we are a lot more efficient with them. So maybe Google or Sohu will not build the cars, but they will certainly make the use of them a lot more efficient and customized.
Spedsta is an awesome RideSharing Application!
Send your EMAIL for more information.