The automotive industry has been a driving force behind global economic growth and has significantly impacted our lives over the past century. As we approach the next decade, this industry is poised to experience a wave of technological advancements that will shape its future.
The Automotive Industry Revolution:
Technological interventions like electronic stability systems and infotainment systems have already transformed the driving experience. However, in the coming years, we can expect even more radical changes that will make future mobility easier, more flexible, and more sustainable.
Cars as a Service:
With the rise in traffic congestion and the availability of ride-sharing options, people now have alternatives to traditional car ownership. The younger generation, particularly Millennials and Gen Z, are more interested in convenient and cost-effective ride-booking services like Uber and Lyft. Shared mobility models are gaining popularity, with 28% of companies exploring on-demand services.
Environmental consciousness also plays a role in their preference for shared mobility. However, it's important to note that future generations may still purchase or lease cars. To cater to these customers, the automotive industry is focused on creating vehicles that support environmentalism while delivering a luxurious ride.
Enhancing the Online Experience:
Millennials and Gen Z are known for their preference for online transactions. This tech-savvy demographic is reshaping the way companies engage with customers, and the auto industry is adapting to their needs. Online vehicle purchasing is slowly gaining momentum, with brands like Lincoln, Infiniti, and Lexus utilising immersive technology to provide a virtual car-buying experience.
Building trust between customers and auto dealers is crucial in this process. As digital dealerships prioritise this aspect, customers will embrace the freedom and ease of buying cars and making payments online. Currently, only 7% of customers stated that they would purchase their vehicle online, but this number is expected to grow, particularly among higher-income individuals.
Evolving Buying Process:
Traditionally, cars were marketed solely for ownership, with cash payments or loans being the common methods of acquisition. Leasing has gained popularity in recent years, and the concept of car-as-a-service challenges the idea of ownership altogether.
The digital platform has facilitated these changes, and with the advent of blockchain and cryptocurrency, we can expect significant transformations in transaction methods. The flexibility and potential offered by crypto transactions provide opportunities for both businesses and consumers. Millennials, followed by Gen X and Boomers, are leading the adoption of cryptocurrency (17%, 9%, and 2% respectively).
Prioritising Environmental Sustainability:
The demand for sustainable cars is on the rise, leading to the incorporation of hybrids and electric vehicles (EVs). Automakers are increasingly prioritising growth strategies to prepare for future trends, with 48% already working on developing fully electric cars. Tesla, led by Elon Musk, has been a driving force in this direction.
However, further advancements are necessary to enhance EV models, including reducing battery costs, improving battery capacity, and streamlining the design and production process. EVs offer a more eco-friendly option with significantly lower emissions and noise levels.
Efforts should be made to ensure a complete CO2-neutral mobility solution and develop infrastructure to support mass charging, addressing concerns about the electricity production needed to charge these vehicles.
The Rise of Autonomous Mobility:
Advancements in artificial intelligence (AI) and machine learning (ML) are making autonomous vehicles a reality. There is already a demand for vehicles that eliminate the need for human driving, and further integration of cutting-edge hardware and software will drive further development.
However, challenges such as liability, cybersecurity, and safety need to be addressed before autonomous vehicles become mainstream. Commercial autonomous-vehicle (AV) taxi services hold significant potential for the future.
The Era of Connected Cars:
Innovative technologies like the Internet of Things (IoT) and 5G networks will enable seamless connectivity between vehicles and their surroundings. Autonomous vehicles will heavily rely on communication between connected cars to ensure safety and efficiency. Designing and engineering models to capture and use real-time data on factors like relative speed and road conditions will be crucial.
Information related to traffic delays and car maintenance will be readily available, enabling automatic decision-making. Connectivity will not only extend to vehicles but also facilitate interaction between drivers, passengers, and other entities. The mobility sector eagerly anticipates the changes that connectivity will bring.
Final Thoughts:
The automotive industry is undergoing unprecedented changes and innovation, with electrified, autonomous, and connected mobility becoming the new norm. As consumer expectations rise and technology continues to advance, traditional automotive companies are thinking beyond traditional services.
To thrive in this revolution, it is essential to embrace and adapt to these trends. Are you prepared for the future of the automotive industry?