Future-Driven: Top Automotive Industry Trends for 2023 Part 2
Let’s now examine the major trends influencing the automotive marketing landscape:
video marketing is changing
Short films are more effective than text at turning leads into consumers in the car industry, according to consumer trends. Dealerships can benefit from a variety of video formats, including how-to videos, automobile highlights, and client testimonials. Tours of auto dealerships are also very popular right now. Dealers and sellers might use virtual reality or films to their advantage.
rising use of VR technology
With the advancement of VR technology, the metaverse is expanding. The same is true of auto dealerships, since recent trends in the industry show that buyers prefer to test-drive a car or visit a showroom before making a purchase. Customers may thoroughly examine an automobile using virtual reality (VR) without physically visiting a dealership. To enhance the client experience, leading auto companies and dealerships are incorporating VR into their dealership photography campaigns.
improving experiences on mobile
Nowadays, smartphones are crucial when buying a car. On their mobile phones, consumers conduct extensive research on the cars they want, looking for the best deals and dealerships nearby. Therefore, websites must have calls to action that are obvious and easy to read on mobile devices.
Modernizing built-in messaging programs
In the automotive sector, messaging services and chatbots are important technological advancements. With the help of these technologies, dealerships may respond to inquiries quickly, freeing up time for other responsibilities. Additionally, they simplify dealership operations by facilitating the management of maintenance and repair appointments.
Spending on digital advertising has increased
The amount spent on digital marketing by the automobile sector rose to $17 billion in 2022, and 2023 is expected to see more growth. According to experts, the increasing rates of mobile and social media usage will increase expenditure on digital advertising. Dealerships must have a strategic plan in place to attract online shoppers at various points in the car-buying process by utilizing social media marketing, click-to-call conversions, and messaging apps.
CASE auto trend: what is it?
One of the largest automotive trends now upending the sector is CASE. Connected, Autonomous, Shared, and Electrified is what it stands for. These four trends, according to market and sector specialists, are what the automobile industry will look like in the future. The CASE will hasten the automotive industry’s change from the way it has operated for hundreds of years in no time at all.
Vehicles Are Now Even More Connected
According to automotive trends, 2023 may mark a turning point for linked cars. The rapid dissemination of data, which can be used to reduce costs, streamline research and development, improve goods and services, and limit emissions, will be the driving force behind the expansion.
Additionally, the potential of the IoT in the automotive sector offers manufacturers a substantial opportunity to update their marketing plans. IoT solutions can provide end users with a variety of advantages by employing interconnected technologies, including improved safety, driving assistance, and predictive maintenance. These sensors’ ability to capture user data gives marketers many chances to encourage upselling.
Furthermore, a strong tendency toward connectivity is indicated by the expansion of the vehicle IoT market. Manufacturers now have more options to market to customers even after they’ve made a purchase, thanks to the IoT. A consistent brand message across all platforms, such as websites and in-car entertainment systems, can help build long-lasting relationships with clients and encourage advocacy for the brand.
The Auto Industry is Changing Due to Autonomous Vehicles
Automakers face a significant challenge as a result of the multiple disruptive forces affecting the automotive industry. The industry is going through one of the most challenging eras in the last 100 years as a result of the convergence of numerous technological advancements and changes in the market landscape. Are manufacturers equipped to handle the forthcoming changes in the automotive business, particularly in the technological sphere?
Adaptation of the Automotive Industry
According to a recent poll, product development and launch periods at automobile businesses are less than 18 months. In truth, a lot of automakers, particularly those who bring a new viewpoint to the automobile industry, as well as businesses that are aggressively investing in and obtaining new technological competencies, appear to be managing the ongoing changes effectively.
Automobile CEOs must overcome challenges while concentrating on cutting-edge technology that satisfies customer and legal requirements. The old automotive infrastructure, which prioritized powertrains, interiors, electrical systems, and safety systems, has changed as a result of this. As goals shift over time, information technology has grown to be an essential component of current trends in the automotive sector.
Shared/Micro Mobility May Signal a Shift in Consumer Behavior
One of the key trends influencing the automobile industry in 2023 is micro mobility, often known as Mobility as a Service (MaaS). MaaS solutions respond to the shift away from car ownership to service-based transportation by combining diverse transport networks to generate personalized travel options. Similar to the “Amazon Effect,” this trend is forcing the auto sector to change. Advocates for shared mobility applaud its ability to reduce emissions, traffic, and air pollution while providing financial benefits. According to Statista, the EU mobility sector will be worth more than $450 billion by 2030.
Global Electric Vehicle Adoption Rises
Sales of EVs are anticipated to rise in 2023, offering the automobile sector some hope. Governments are employing creative ways to boost sales without raising expenses or helping households with high incomes.
For qualifying vehicles built in North America, the US will provide a $7,500 EV tax credit.
An EV leasing program with subsidies for low-income households is being developed in France.
Germany will, however, cut back on subsidies for plug-in hybrid EVs and increase incentives for battery EVs.
Starting in January 2023, Norway will gradually eliminate its tax advantages for pricey EVs.
However, there may be a minor decline in EV sales in the first half of 2023. Due to the uncertain demand in the next months, battery makers have considerably decreased their output since early December.
Rising Electric Vehicle Adoption
The situation is not wholly bad, despite the fact that it might take some time for the Chinese EV market to adapt to the new subsidy-free environment. The expiration of Chinese subsidies for EVs may cause a slowdown in demand, but it shouldn’t result in a falloff. In addition, consumer trends in the auto industry indicate that limited access to EV charging stations continues to be a major obstacle.
How Can Automakers Benefit from Adapting to the Changing Tech Landscape?
Security, compliance with local rules, and competition from non-automotive industries are some of the difficulties connectedness presents. Liability, cybersecurity, and safety issues affect autonomous vehicles. In order to electrify, it is necessary to build a charging infrastructure, manage the grid, and address customer concerns regarding battery life.
Despite these difficulties, automakers are use them as expansion opportunities to sell additional vehicles. According to research, automakers prioritize growth initiatives to set themselves apart in the future. For illustration:
51% of people are focusing on technology to make affordable, efficient transportation possible.
A staggering 48% want to control the market for fully electric cars.
37% of consumers are investing in performance improvements for high-end, luxurious cars.
36% of respondents want to be the first to mass-produce autonomous vehicles.
In terms of services that resemble taxis, like Uber and Lyft, 28% are considering shared mobility solutions.
Adviser’s Advice For The CASE Auto Trends
It’s not easy to stay on top of trends and stay ahead of the curve. Without adequate planning and prioritizing, you cannot join the bandwagon. Here are some expert advice that will help you more readily accept the inconveniences.
1. Invest in technology to expand the market for driverless vehicles.
To maintain a frictionless experience, you must constantly develop and reengineer the capabilities of autonomous vehicles because product values are linked to software and operating systems. You also need a committed group of experts who can quickly fix tech problems like security problems and malfunctions.
2. Think about working with nascent start-ups or tech teams.
To make drives and adventures memorable, CASE needs constant evolution, upgrading, and precisely calibrated user experiences. Unfortunately, scaling up and substantial capital inputs would be required to do this.
Try collaborating with up-and-coming start-ups, tech teams, service providers, etc. to speed your innovation process and enhance autonomous and electrified infrastructures to make this process a little bit simpler.
3. Examine your value proposition once more
While these trends gradually spread, a sizable segment of the market will still be made up of traditional automobile consumers. They are a component of your target audience, thus you cannot afford to lose them.
The basic automobile selling, online sales, and innovative mobility services should all be combined in your new company.
4. It’s time to abandon the traditional auto industry business paradigm.
You can no longer afford to remain in a silo in the age where everything is going digital first. You must become omnichannel and establish a presence across all channels. Utilize social media networks and online vehicle marketplaces to raise your brand’s visibility among consumers.
Allow them to seamlessly transition between offline and online modes as well. Make each step of the purchasing process seamless.
The Auto Industry is Changing Due to Autonomous Vehicles
One of the major developments in the automotive sector for 2023 is autonomous vehicles. By 2035, autonomous driving could generate $300 billion to $400 billion in income, according to McKinsey. Businesses like Google, Tesla, Ford, and General Motors support a future without steering wheels, and Google even has a division dedicated to autonomous vehicles. Since they can perceive their surroundings and drive safely in them, self-driving cars are said to be safer because they don’t have to worry about things like human error and driver weariness. They are also more fuel-efficient.
However, the technological and safety barriers that still need to be overcome prevent them from becoming more autonomous vehicles on the road. Autonomous vehicles have occasionally had trouble handling unforeseen events on the road, especially in bad weather.
There have been some success stories in spite of these obstacles. A few US cities as well as areas of China already have self-driving taxis on the road. More driverless trips will be taken when technology is developed and improved.
Companies are anticipated to continue investing in autonomous vehicles in 2023, given the chance to drastically disrupt private transportation and influence the automotive industry’s future.
online purchases of vehicles
When automobile purchasers had no other option but to seek out cars online, everything began. The new standard and an important trend that will last for years in the auto business is online automobile shopping. Global demand for online car purchases is mostly driven by the thriving e-commerce sector. Increased awareness of its convenience, as well as increased levels of computer literacy, internet accessibility, urbanization, and disposable income, all contribute to this.
How Online Vehicle Purchases Are Changing
Social media networks also help the market flourish by offering creative vehicle discounts. On the other hand, the market is expanding because of the increase in personal vehicles brought on by better urban road infrastructure and by young people’s preference for used cars.
The Market for Automotive Parts is Expanding
The future of the automotive industry indicates that the market for parts will continue to expand quickly. Sales of the segment will increase during the first half of fiscal 2023, while revenue for the sector as a whole will increase at the same rate to $33.8 billion. From 2023 to 2033, the market as a whole is expected to increase at a CAGR of 5.5%, totaling USD 984 billion.
The off-road goods and accessories market is one that the specialty equipment sector is aware of, especially for pickup trucks and SUVs like the Jeep Wrangler. More than half of pickup owners buy off-road components and use their vehicles for outdoor activities. A more recent trend known as Overlanding mixes off-roading with remote travel and camping, and includes items like mounted tents.
Chip Shortages Still Affect Automotive Manufacturers
Chip shortages have led to a variety of changes in vehicle trends, not all of which are good. Particularly for the automotive industry, the chip lead times still seem to be quite considerable.
The delivery lead time for chips dropped by six days to 25.5 weeks in October 2022, the most since 2016. A faster chip supply is reported by about 70% of industrial enterprises, presumably as a result of weaker consumer demand and spending. Since semiconductor production has surpassed full production-rate usage since 2019, with current rates above 95%, these constraints are anticipated to last beyond 2023.
According to Auto News, researchers predict that the chip shortage will cause a 3 million-vehicle production loss in 2023.
Impact of High Prices and Low Inventory on Auto Sales
Up until December 2022, new car inventory levels were 52% lower than in December 2019 but 56% higher than in January 2022. Due to slowing light-vehicle sales in late 2022 as a result of high prices, rising borrowing rates, and a lack of supply, new inventories surpassed sales by a sizeable margin for the first time since early 2021. In addition, OEM manufacturing fell as a result of supply chain problems.
Impact of High Prices and Low Inventory on Auto Sales
New vehicle prices continue to rise despite rising inventory levels, setting a record average transaction price of $49,507 in December 2022. The Ford F-Series truck, the most popular car in the US, has an average price of $66,451, which places it in the luxury segment. The average cost of an electric vehicle is expensive as well, at $61,448.
Sales are falling for dealers and automakers nationwide as a result of high pricing and rising loan rates. Prices are anticipated to decline as supply-chain concerns get better and sales continue to decline. However, while the Federal Reserve seeks to reduce inflation, interest rates can continue to be high.
Trends in the used car market
Because fewer people are buying new cars, they keep them for longer, which decreases the supply of used cars and drives up costs. In addition, interest rates on loans for used cars are higher than on loans for new cars. Similar to new car sales, it is predicted that used vehicle sales won’t reach pre-pandemic levels of about 40 million units annually until 2025.
According to trends in the used car market, prices for used cars have decreased overall as a result of lower sales, but some segments, such as pickups and vans, have held their value better than others, such as SUVs and CUVs, which have experienced the biggest price drops despite being well-liked by buyers of new cars. Pickups and vans have maintained their value thanks to the demand for work vehicles.
The automotive industry’s future could be powered by hydrogen.
Toyota and other automakers are looking into the possibilities of hydrogen fuel cell vehicles, which release only water and provide a more accessible substitute for batteries, to allay worries about the longevity and availability of EV batteries.
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