As the global automotive industry enters a new decade, it’s facing unprecedented uncertainty and sky-high consumer expectations.
While the automotive industry experienced a fair amount of turmoil in 2019, no one could have predicted the chaos and uncertainty that has characterized the first half of 2020. As consumers adjust to a new normal over the next six months, vehicle manufacturers will need to do the same.
The automotive industry should be prepared for shrinking sales and steep competition in the latter half of 2020, as well as the emergence of new means of reaching and selling to potential buyers. As opportunities to connect with consumers face-to-face become increasingly rare, making memorable first impressions will be more critical than ever before — and we predict that manufacturers will turn to a slew of new technologies to help them do just that.
How Vehicles Will Change in the Coming Months and Years
As digital technology continues to advance, automotive manufacturers will find themselves in a race to offer the most impressive tech-powered driver experiences at the most competitive prices. While consumers will always value fuel efficiency, aesthetics, and a smooth driving experience, manufacturers will look to a range of cutting-edge technology features as a key differentiator and selling point for the remainder of 2020 (and beyond).
Increased Connectivity and Better CX
Drivers want their cars to deliver the same seamless connectivity they experience with their phones, tablets, and laptops, and thanks to systems like Apple CarPlay and Android Auto, there’s no reason why they can’t get their wish. Recent developments make it possible to provide consumers with a seamless transition between phone and car, dramatically improving the utility and user-friendliness of car infotainment systems.
Thanks to vehicles’ increased connectivity, many technology updates, safety updates, and more can take place automatically and remotely. Moving forward, consumers buying new cars can reasonably expect to spend much less time in repair shops than they have in the past.
Robust Data Security
Particularly as connectivity between cars and smartphones increases, airtight data security will become increasingly imperative. Many drivers don’t realize that their key fob, steering wheel, and infotainment systems are fairly easy to hack, and it’s up to manufacturers to secure these critical systems.
Oil change lights are old news — today’s cars can aggregate and analyze multiple streams of data to alert drivers not just to existing problems, but also to future ones. If a taillight is about to burn out or brakes are acting up, vehicles’ computerized systems will know — and warn drivers — well in advance.
The Internet of Things makes it possible to record preferred settings for individual drivers, with the driver’s seat, mirrors, radio, and air conditioning adjusting each time they take the wheel. At the same time, artificial intelligence is enabling vehicles to detect when drivers become tired or distracted, prompting them to perk up and remain focused on the road (or pull over to rest). These new features promise to keep drivers safer and more comfortable behind the wheel.
How Car Buying Will Change Moving Forward
Though consumers are keeping a closer eye on their spending as the economy continues to waver, it’s difficult to predict exactly how the ongoing global pandemic will affect car buying. While tighter household budgets and wariness of in-person shopping may put a damper on demand, it’s also possible that fear of infection will make public transportation a less appealing option to many consumers, who may opt to become first-time car buyers. No matter what, changes are on the horizon, and manufacturers must be ready.
Shorter Model Cycles
The pressure to digitize and the increasing emphasis on technology may radically alter design and production schedules, making vehicle model cycles look more like those of phones or computers, with consumers wanting to upgrade after only a couple years. It’s possible that, in response, we’ll see leasing become a more popular option than buying, and the industry needs to be prepared to respond to this change.
Altered Car-Buying Experiences
As the COVID-19 pandemic makes in-person shopping experiences more difficult, AR and VR may well become mission-critical for manufacturers trying to reach potential buyers. These systems allow potential buyers to explore vehicles without setting foot in a showroom. Many manufacturers are likely to launch such “virtual showrooms” as the world adjusts to a new short- and medium-term normal defined by social distancing.
Preparing for the Twists and Turns Ahead
While it is impossible to predict the future, it is possible to prepare for the most likely contingencies. And, in an increasingly uncertain world, a carefully crafted plan will be essential.
SEI’s consultants have extensive experience and expertise in the automotive industry, and are dedicated to helping our clients weather the storm during this difficult time — and emerge stronger for it. To learn more about how SEI can help your business, contact us today.