I start the year with a summary of the main automotive trends for next year. Not this year, though. In fact, the Covid crisis reversed absolutely all the predictions and projections made in early 2020.
In recent months, my team and I have started from scratch, tracking and dissecting the effects of the pandemic on the mobility industry. After long and lively discussions (it’s anything that’s remained unchanged, whether it’s a pandemic or not!), here’s our 20 most sensitive trends that will shape the long-term automotive industry in a 2020 explained through Covid and beyond.
It’s about change
Knowledge as 21st century oil, the transition from “strength” to “computer power”: knowledge as a service deserves to grow after Covid. A key transformation, included in Tesla’s differentiation strategy, will be the shift from force to computing force. On the other hand, the continued attention of German and Japanese brands to the force can soon be unbalanced with the new needs of the virtual architecture of the vehicles.
The 2.five autonomous point to become the Stop Gap preference: Covid has derailed its plans to move from point 2 to point four of the vehicle range. Automakers are now contemplating two divergent approaches: first, Tesla’s strategy of combining camera-based technologies to move to point five, and second, the cautious approach that seeks to persist in point 2, 5 for some time before. move to point four. There is also the eternal debate between progression and deployment. I’m willing to bet that deployment rather than progression will be the winner of the autonomous race and that China will be the first to cross the finish line.
Fleet market reorganization: Fleet markets have sometimes made a profit during a recession. This time it might be a little different. Hertz’s sinking is symptomatic of market decline. Car allocations can simply be reduced (paid) through companies, which would damage the lucrative commercial fleet market, i.e. the premium segment. A ray of hope will come in the form of the expansion of personal leases.
Growth in subscription facilities: I have been positive about subscription facilities and remain positive as they spread rapidly in the upcoming automotive markets. I anticipate two main adjustments here: one, from the premium segment to the larger segment offerings, and two will be mainly city-based models to become more national models.
Generation Z as auto buyers: One of the great achievements of automakers will be the adult age of Generation Z customers. This trend will be felt in countries such as China, India and Saudi Arabia, which have a young population, as well as in the United States, where car ownership occurs at a much younger age. Automakers will inevitably create differentiated methods aimed at Generation Z, while special models based on connectivity technologies (I think the Chinese will borrow thunder here, back) will be designed to attract the personal tastes of Generation Z customers.
Heterogeneous society as a client: After Covid, social polarization by age, gender, source of income and even political lines will be intensified. This creates a major challenge for automakers who have so far excelled in segmentation and undertargeting of cars and customers. The real challenge now will not be to build more models to inspire greater customization. The good news is that new virtual IoT responses can do just that. As a result, automakers are executing what we call “customer transformation,” necessarily creating custom-designed and tailored virtual responses for vehicle customer lifecycle control.
Future of paintings: in the place of paintings, we will see a transition from paintings to paintings of his castle, that is, at home. As a result, the number of kilometres of travel and the role of the car, which in the past was primarily for business trips, will be minimized for weekends, night trips and shorter trips. These trends will once again challenge automakers who rely heavily on higher mileage due to travel. Another result of relief in the adventure miles will be felt in the decline in sales in the secondary market.
Luxury will manifest itself in the purposes of “digital” cars: We expect a minimisation of luxury car sales of 30 to 35% in the short term before resuming in the medium and long term. At this point, luxury will be reinvented, manifested in “digital” experiences.
Cars as fitness points: built-in, purchased and built-in features remodel the car into fitness, wellness and wellness (HWW) centers. New HWW features, such as eroniseurs and ozoniseurs that purify air in cars, as well as auto-cleaning surfaces, will be popular car deals.
Cars as a component of connected life solutions: cars will be an integral component of connected life solutions. The popularity of voice and non-public attendees, combined with the launch of 5G in the near future, will connect the vehicle at home, the vehicle to the vehicle and the vehicle to everything. For my component, I can’t wait to get home on a bloody winter night, while I have to set the temperature at home to 27 degrees Celsius.
Because As A Marketplace: in the future, everything similar to mobility on the road will be done through a car. Enabling technologies will turn cars into markets, enabling consumers to do everything they can: refuel, buy-to-buy tolls, get on-demand (FoD) features, and more, in the convenience and convenience of their cars.
IoT platforms for connected cars: Like cell phones, we’ll see operating systems as the norm for cars. This will be a key way to achieve differentiation in the future. I expect more than one hundred connected car features to be available to consumers in emerging markets and evolved through 2025, compared to existing figures of less than 40 in high-end vehicles at most.
Two-speed global economy: global car sales will recover much faster in China and the US than in the EU and India. After 21 months of continued decline, the Chinese automotive industry expanded in April and May. New expansion hot spots may emerge in Russia and Eastern Europe.
Increased strategy for adjusted product development, supply chain diversification: the Covid crisis has highlighted the automotive industry’s over-reliance on Chinese replacement suppliers, particularly in the electric vehicle (EV) market. As automakers re-examine their price chains, they will compare the reused and shared portions for the progression of new products. We may also see automakers reduce and consolidate the amount of ingredients, variants and powertrains. Diversification of the source chain will open up opportunities for countries such as India and Mexico. Meanwhile, Brexit and other protectionist economic policies will inspire relocation that relocation in the future.
New business models of collaboration to accelerate: informed through a partnership/collaboration approach, the new business models will expand the price chain. For example, automakers will also become public charging stations, just as VW has. Another example is the need for a platform and vehicle architecture committed to making electric vehicles. The initiatives here will increasingly involve licensing models or collaborative efforts such as GM’s with Cruise and Honda.
Online To Boom: We’re already in the middle of a paradigm shift from offline to online. Sales of new and used cars, as well as vehicle-related facilities, will be platforms/virtual. Because the car’s later purposes are also undergoing immediate virtual transformation, OEMs will want to reconsider their virtual retail strategy.
Growth in portfolio percentage throughout the product lifecycle: Automakers are now focusing not only on selling equipment, i.e. metal, but also on generating uninterrupted gains during the vehicle lifecycle. In their quest to create value, retention and improvement, automakers will advance on connectivity platforms, traditional offerings and FoD services.
A circular economy, the automotive industry is innovating at 0: Covid will boost automakers’ Vision Zero projects. Automakers have been heavily involved in building carbon-neutral plants for automobiles, fighting for 0 deaths or for zero-emission cars. But what we’re seeing now is the addition of use and reuse practices – the precept of “design to de-dismantling” – at the level of the design itself. These circular economy practices will anchor the transition to innovation 0.
Sedan’s return and new frame styles: we can witness the return of the sedan, illustrated through the VW Golf, as the car of the moment. If SUVs and crossovers were the dominant chassis styles of the past decade, the next decade you can see the emergence of new Covid-powered chassis styles, the transition to a once-in-a-car type, or the start of a new generation of square and monolithic models. . models for the developing visitor segment of Generation Z.
Renaissance of the used car market: in an environment where price is paramount, the used car market will return. Valuations for used car brands are on record (get Vroom shares right away!), while the costs of used car auctions are increasing. In the meantime, we’ll see a big shift towards virtual market location models for used cars. To date, Frost and Sullivan has already known six of those used car sales platforms that are likely to migrate completely online over the next 3 to five years.
Covid would probably have baffled the auto industry (not to mention our annual forecast). However, it has provided automakers with an unforeseen opportunity for introspection and the toughest concepts and trends that will shape their long term over the next decade.
I am managing partner of Frost and Sullivan, regional manager of its Mid-East, African and South Asia (MEASA) operations and head of Mobili’s practice.
I am managing partner of Frost and Sullivan, regional manager of its Mid-East, African and South Asia (MEASA) operations and head of global practice for the Mobility, Aeroarea, Defense and Security teams. I am also the founder of an expert group working on (mega) long-term trends. My team and I introduced the “Macro to Micro” technique through megatrend analysis in 2008, which has since been tested and tested with Fortune 1000 corporations in the progression of white area opportunities. I wrote “New Megatrends,” published in 2012 with Palgrave Macmillan, which has since been sold in more than 30 countries and is lately being translated into Chinese for launch in the Chinese market in 2014. I consulted Fortune 1000 corporations (customers such as PG, FordArray Philips, BMW, Fiat Group, Nissan, Toyota and UNIDO). I am an engineer and MBA from the University of Leeds School of Business, so I am now a member of its advisory committee. I also did an executive course at the Kellogg School of Management. I am a recognized opinion leader and a charismatic futurist who combines a sense of engineering with forged business experience. Follow me on Twitter: @Sarwant.