When the chief executive of a fuel retailer starts talking up driverless cars, you know the world is changing.
Caltex Australia boss Julian Segal has a vision where customers can book an autonomous vehicle via a smartphone app and have it pick them up and drop them off at one of his company's hundreds of retail convenience stores.
This is surprising, given driverless cars are more fuel-efficient and will eventually result in fewer people owning their own vehicle. However, Caltex already owns a 20 per cent stake in a car sharing start-up and says it has to adapt to changing technology to stay relevant.
Less surprisingly, Segal is bearish on electric cars, which he says will take a decade or more to widely replace traditional vehicles because of the sheer scale involved. Those comments do not sit well with the electric car industry, which points out the commercial use of driverless cars is a long way behind electric vehicles, which are selling in their millions.
Caltex is shaking off its former identity as an oil refiner now it has the independence to pursue its ambitions of owning a major convenience store network following the sale of US energy giant Chevron's 50 per cent stake last year. Retail is a big focus for Segal, who confirmed on Tuesday the company would be interested in looking at Woolworths's network of 600 petrol stations if they came on the market
Woolworths instead of dividends?
Woolworths is looking for a home for those assets, which are worth as much as $1.5 billion. Caltex could partly fund a deal of that size out of improved free cashflow instead of returning that money to shareholders in the form of a share buyback.
While Caltex is focused on leveraging its network of petrol stations to take on Woolworths and Coles in the convenience store market, it will take a while. The vision is a more innovative offering similar to networks in Britain, Japan and the United States, selling everything from coffee to dry-cleaning and parcel pick-up services. Segal says the pilot programs are still 12 to 18 months away and the initial capital investment will be less than $30 million.
Caltex will also continue to dip its toe into the water when it comes to new technology and work with self-driving car operators on potential opportunities.
"The issue of innovation is very important," Segal says. "I think Caltex survived for 150 years because it was aware of what was happening around it." The strategy is to look at new technology via partnerships and joint ventures rather than building Google-style research and development labs. Segal also says innovation is not just about digital but working with customers such as mining companies to improve fuel efficiency.
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