Trends in the Automobile Industry
The global automotive market will be buoyed by positive macroeconomic development, such as the growth of the global middle class, and established markets will continue to rely on emerging economies, such as China. Revenues will develop differently from country to country due to product mix differences. Consumer mobility behavior is changing, with up to one out of every ten cars sold in 2030 being shared. This will lead to an increase in the market for fit-for-purpose mobility solutions.
Electric vehicle production
The United States and Europe are leading EV sales, with China lagging behind. China and India are also planning to phase out ICE vehicle sales in the next 20 years. However, despite the recent progress, Europe still lags behind the United States and China in EV production. In addition, the European market has been slow to adapt to the technology. However, the UK is aiming to dominate the vehicle market with EV sales by 2030. Furthermore, Denmark and Ireland plan to adopt EVs as part of their automotive industry strategy. EV sales are also increasing in Europe, with China expecting to stop ICE vehicle production in 2035.
In recent months, the EV market has made great progress, with sales of PHEV and BEV exceeding two million last year. In March 2022, the number of all-electric vehicles sold by Hyundai jumped by seventy percent. Meanwhile, Mercedes doubled its sales of all-electric cars and announced that it is selling out of them. Further, the overall auto industry saw a 15.3% decline in new vehicle sales last year.
While Chinese EV manufacturers face a lagging sales market, international OEMs are investing heavily in EV production. The Chinese market will account for half of the global EV sales by 2021 and is expected to double in size by 2022. In addition, Chinese automakers are expanding their global footprints as EVs become more prevalent in emerging markets. Tesla, for example, has begun production of EVs in Shanghai, delivering its first local-made vehicle in December. Moreover, other manufacturers like Volkswagen and Toyota have also announced plans to establish EV plants in the country.
Consumers in segment A and B are less likely to research EVs before purchasing a car. The latter is more likely to buy an EV than segment E. Segment E is the most likely to switch brands. However, EVs have other benefits. These advantages have been outlined in the previous section. This segmentation was made before the COVID-19 pandemic. This data will be of great interest to car manufacturers and other stakeholders.
The choices of automotive materials are driven by a combination of environmental concerns, customer expectations, and legal requirements. Materials must be lightweight, fuel-efficient, and durable while meeting strict emission standards. Automotive companies must consider environmental concerns as well as cost to create a balanced design. A combination of these factors will determine which materials are most appropriate for different applications. Several materials are used in cars, from lightweight to high-performance, depending on how they will be used.
Automotive composites are an increasingly popular alternative for the lightweighting of cars. Using such materials has many advantages, including their easy moldability, increased aesthetics, and reduced weight. This could result in mass reduction and carbon emissions. The future of the automotive industry depends on engineered plastics. But what are the advantages of using these materials in vehicles? Let’s discuss some of them. The automotive industry relies on a wide range of materials, including aluminum, steel, and polymer-based components.
Aluminum is the father of all materials in the automobile industry. During the olden days, almost every component was made from aluminum. While aluminum is heavy and brittle, it is useful for making lighter cars. Eventually, steel was replaced by aluminum, but it remains used in a few rare cases. In fact, today, more than 80% of cars are made of aluminum. Aluminum is used to make vehicle body panels, as well as many parts of a modern automobile.
Steel is another common raw material used in automobile production. It is used for many car parts. Aluminum and glass are also used in the automobile industry. Plastics, rubber, and special fibers are also important parts of the automobile industry. As a result, the automobile industry is one of the biggest consumers of these materials. Various materials used in vehicles require advanced manufacturing technologies and strict safety standards. If you are planning to manufacture a new car or a car part, you should be aware of the costs involved.
As the industry moves toward more consumer-centric marketing, it is important to consider current brand trends in the automobile industry. Many auto parts retailers have traditionally relied on their product quality and niche positioning to gain traction, but consumers now expect more from a brand’s advertising. Branding strategies used by auto parts retailers and online mechanics share some common values. Both industries emphasize speed, progress and power, while making use of chrome-tinged design elements.
In the near future, connectivity and basic features will become the defining features of automotive products. In fact, many marques are using technology as a basis for their positioning, but it’s not likely that any of them will be able to sustain such an approach over the long term. The slow growth in German car sales makes BMW one of the most hesitant manufacturers to invest in the transition to EVs. While BMW’s market share is the highest in the world, it’s still among the slowest-growing brands.
According to a report by Capgemini, customer satisfaction and loyalty go hand-in-hand. In fact, only 10% of automotive shoppers report being completely unsatisfied. In contrast, eighty-five percent of highly satisfied customers say they’d purchase from the same dealership or brand again. A seamless experience for the customer will increase revenue for a dealership. It’s not surprising that a great automotive experience can boost sales by more than 25%.
While social media continues to grow, the automotive industry’s social channels continue to lag behind. Facebook is the most popular social channel among automakers, with nearly twice as many profiles as Twitter and YouTube combined. Twitter and Instagram are not as popular, but offer higher opportunities for engagement. In 2016, more than five hundred million automakers used Facebook to communicate with their customers. Aside from that, companies were also experimenting with video content.
Online car sales
Consumers are choosing online car retailers over traditional brick-and-mortar dealerships. While consumers will still have the option to test-drive vehicles at their local dealerships, many of them would prefer a more dynamic, personalized experience. Despite the complexities of online car sales, the benefits are numerous and are already beginning to dominate the automobile industry. In fact, 51% of auto buyers are interested in buying used cars online, and the trend is only expected to continue.
The recent COVID-19 pandemic affected auto sales. The pandemic pushed sales teams home and closed showrooms, forcing many consumers to purchase their vehicles online. The COVID outbreak forced many automotive dealers to digitalize and succumbed to the trend of e-commerce. Earlier, only 32% of US car buyers were open to purchasing cars online; today, 61% of US car buyers have opted to purchase their vehicles online.
A key benefit of an online car purchase is that consumers can compare various brands and models in one place. The added benefit of this strategy is that customers can see different vehicle configurations and options before making a decision. A digital ad pointing shoppers in the right direction can also save the dealership’s valuable real estate, while online sales can help them save money. As a result, the benefits of online car buying are obvious for both buyers and sellers.
Automakers are becoming more serious about marketing and distribution. They are facing the inherent weaknesses of traditional franchised-dealer distribution and are looking to expand their participation in the customer life-cycle value chain. The changes are changing the nature of competition and the consumer’s experience. Hence, it is important for automotive manufacturers to adopt revolutionary ways to sell their cars. You can make this change happen by implementing these changes and transforming the way your dealers sell vehicles.
Circular economy concepts
The automotive industry is at the forefront of innovation and sustainability, having introduced vertical integration in manufacturing processes as early as the early 1900s. However, manufacturers today are turning to circular integration in a bid to save resources and create jobs. According to Accenture, automobile companies could realize $400 billion to $600 billion in revenue through circular business models by 2030. Here are some examples of how automakers can contribute to the circular economy. Let’s start with remanufacturing. Remanufacturing auto parts reduces energy and water consumption by 80 percent. And it can reduce overall waste by up to 70 percent.
A circular product has a defined use phase. For instance, the modern equivalent of bartering a buffalo hide for a flint blade is Vinted, a community platform where used clothes can be sold for cash. Another example is Stootie, an app that lets users swap services and products. The idea behind these new applications is to ‘use’ rather than own’. Ultimately, the circular economy is an ideal model for the automotive industry.
The automotive industry already focuses on the circular economy. Its vast production process involves a variety of materials, including metals, plastics, and other common household materials. It is continuously optimizing resource use, addressing resource scarcity and waste generation. Additionally, it provides many economic benefits. Remanufacturing, product remanufacturing, and recycling are already common practices in the industry. These practices, when implemented at scale, will reduce energy, water, and chemical consumption.
The automotive industry has embraced these circular economy principles, and has created a coalition of more than 60 automakers, research institutions, NGOs, and international organizations. This initiative has also produced a series of circularity “roadmaps” with inputs from a variety of organizations. The World Business Council for Sustainable Development has outlined the details of the transition. The Road Ahead: Towards the Automotive Circular Economy