Cox takes a deeper dive into mobility

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Cox Automotive will create a mobility division that positions the dealership software and services juggernaut for a future in which fewer consumers will buy or own vehicles.

The multibrand industry player, with more than $7 billion in revenue last year, expects the new mobility business to dwarf its cash-cow Manheim auction business within a decade, according to an internal memo obtained by Automotive News.

Cox will consolidate its growing portfolio of tech- related investments to create Mobility Solutions Group. The division will deliver software and services to car- sharing and ride- hailing companies, vehicle subscription programs and, eventually, robotaxi fleets.

“We have constantly, through generations and generations, been a disrupter and disrupted ourselves,” Cox Automotive President Sandy Schwartz told Automotive News. “There’s going to be a big change in transportation as a service, and we want to position ourselves to be a viable company in the future.”

Schwartz: Sees “a big change”

Cox expects the division to grow to revenue of $100 million to $150 million in the next few years, and then balloon into a $5 billion business in a decade, according to the memo.

Although the mobility universe is still coming into focus for the industry, many calculate that it will be an enormous opportunity. Consulting firm Accenture estimates total industry revenue from mobility services will hit $1.4 trillion by 2030. Automakers such as Ford and General Motors have announced major investments in self-driving technology businesses. Dealerships and manufacturers are experimenting with subscription and car-sharing programs.

Cox’s zeal to stake a claim is clear in the language of its internal memo. The company pegs its opportunity in mobility at $280 billion.

“That’s 10 times as big as the markets we play in today,” said Joe George, Mobility Solutions Group president.

“Driverless cars will be a complete game changer for the automotive industry — akin to the internal combustion engine — and the new marketplace that develops around this technology could be the single biggest growth opportunity for any industry in a generation,” said George, who previously was interim president of Cox Automotive’s Media Solutions Group. “We think there is a reasonable path to Mobility Solutions being $5 billion in revenue in 10 years — much bigger than Manheim or Autotrader at their peak.”

New fleets

Mobility Solutions Group will enable Cox to do for next-generation transportation services companies what it has historically done for car dealerships.

The group will provide fleet management services, including prepping vehicles to join and leave fleets; service and maintenance; and remarketing.

The business will help automakers, dealers and fleet operators improve their customer experience via technology and develop new business models.

George said Cox’s move is a response to where the industry is heading.

“It’s about following our clients where their businesses are going,” he said. “How we all consume mileage as consumers is going to continue to evolve. A bigger and bigger slice of that is going to be through consumer fleet-based services.”

Cox research shows that consumer attitudes about the necessity of vehicle ownership are changing, with 39 percent of respondents saying access to mobility is necessary but owning a vehicle is not — a 5 percent increase since 2015. For urban consumers, 57 percent said access to mobility is more important than owning a vehicle, a 13 percent increase since 2015, according to a consumer attitudes study by Cox.

But Cox is making a big bet on a future that is far from clear. The absence of a regulatory and legal framework that covers autonomous vehicles means it will be years before consumers are riding in robotaxis. Meanwhile, subscription programs and car-sharing services are in their first inning.

Cox’s current business model is based on private vehicle ownership, said Sam Fiorani, vice president at AutoForecast Solutions.

As consumers shift to shared ownership, it’s in Cox’s best interest to get ahead of where the market is going, Fiorani said. “They are afraid of becoming the carriage maker in an automotive field,” Fiorani said.

The mobility focus is not without risks, however.

“If it distracts from all the stuff that’s making money for them now, that could be a risk for investors and for the company in the next five to 10 years,” Fiorani said.


Schwartz admits he does not know what the auto industry will look like over the next decade.

“What we’re doing is setting ourselves up so that we can be a great provider of services,” he said. “We’re in a great position to be able to create and develop those next skills and those next services that are going to be needed as we move forward.”

Schwartz said it is time to plan for what’s next.

“We have to start preparing today,” he said. “Some of these businesses are going to develop overnight and some of these businesses are going to take time to build.”

Cox hopes to become an infrastructure provider, delivering a suite of services needed to maintain and manage shared and autonomous fleets, AutoForecast CEO Joe McCabe said. That could accelerate the transition to mobility services as fleet operators and consumers are assured there will be services to wash, charge, fuel and maintain autonomous and shared vehicles.

“If Cox can make a starting investment now and be involved with the whole process going forward, then they can adapt when necessary,” McCabe said.

The company has a growing stable of mobility brands and investments.

Atlanta-based Clutch Technologies, which Cox has absorbed, has developed a technology platform that powers vehicle subscription programs for Mercedes-Benz, Porsche, BMW and about 30 dealers. Clutch uses predictive analytics to help automakers and dealers plan vehicle inventory and mix. Its algorithms recommend vehicles to members based on their use pattern.

“We think that subscription, no matter how small it is, it is definitely a part of the transportation future,” Schwartz said. Clutch is a software “platform that, over time, dealers and others will use to manage fleets.”

Consolidating the various mobility-focused investments, which also include Ridecell, Ouster and Getaround, into a single business group will speed product development, boost collaboration and make it easier to manage partnerships, Cox believes.

There’s an arms race going on in the mobility services business, Schwartz said.

“The first to market with products and the first to see what needs to be done will be the winner,” he said. “And we absolutely want to win in this space.”

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