Future-Driven: Top Automotive Industry Trends for 2023 Part 3
Trends in the Automotive Industry
Automakers must concentrate on lowering emissions and creating more environmentally friendly transportation options since consumers are placing an increased emphasis on environmental performance when choosing automobiles. In fact, the majority of prospective automobile purchasers now think about a vehicle’s environmental impact before buying it, with many willing to pay an additional premium of more than £2,000 for lower emissions.
Luxury Automakers to Expand in 2023
According to Market Watch, the Luxury car market was worth USD 409,263.47 million in 2022. According to market trends in the automotive sector, the market will expand at a CAGR of 9.15% over the forecast period, reaching an estimated value of USD 691,878.75 million by 2028.
Due to the rise in tangible luxury goods and increased disposable incomes, luxury car businesses are expanding. The market is expanding as a result of consumer desire for environmentally friendly transportation options like premium electric automobiles. Because financing is more easily obtainable and used luxury cars are less expensive to purchase, their acceptance is rising. A strong market outlook is being created by manufacturers’ investments in smart mobility technologies, including personal voice assistance, autonomous driving, AI, and ML.
Models for Automotive Sourcing are Changing
In order to diversify their supply chains and reduce risks, regional suppliers are becoming more popular in the automotive industry. Demand growth and supply chain disruptions are the driving forces behind this trend. OEMs are looking for alternative suppliers to increase their sourcing flexibility and accelerate time to market. The quest for alternate sourcing possibilities has also been impacted by the trade conflict between the US and China. Another reason for the increase in local sourcing is labor costs, which are lower in nations like Taiwan, Cambodia, and Laos than in China.
In addition, there are a lot of parts that go into making an automobile (30,000 on average), and materials make up a sizeable chunk of the cost of production (40–50%). Automotive procurement teams must play a crucial role in managing supplier networks and supply chains, both for current and upcoming vehicle models, in order to maintain cost competitiveness. The company’s goal must be in line with emerging technologies and business methods.
Technology Obstacles Produce Growth Possibilities
The industry is transforming like never before as a result of CASE (Connected, Autonomous, Shared, and Electrified) technology. This will influence the automobile industry’s outlook going forward as well as create growth prospects for automakers in the ensuing years.
Trends in the Automotive Industry
Advanced automated cars (L3, L4, and L5) are anticipated to make up roughly 16% of all new LV (light vehicle) sales in the US by 2035. These figures, which rely on projections of the growth of EV-charging infrastructure, are regarded as conservative given the expectation that EVs will reach total cost-of-ownership parity with ICE vehicles by 2025.
To enable new enterprises, OEMs will also develop new operating models. Auto OEMs and many of their Tier 1 and even Tier 2 suppliers will likely need to reorganize and broaden their current operating models in order to accommodate new business-generating items and services as well as attract the most recent workforce talents. Auto OEMs will undoubtedly continue to focus on their core business, which is often centered on product and industrial platforms and comprises cars, aftermarket repairs and maintenance, and financial services relating to those cars.
Conclusion
I hope this blog post has helped you better grasp the impending trends in the automotive sector in 2023. Despite the anticipated global recession and supply chain disruptions, industry trends indicate a bright future. All you have to do to win over clients as a car vendor, dealer, or manufacturer is develop adaptable yet effective automobile marketing techniques. Make sure you stand out from your competitors by emphasizing each minute element of your marketing and remaining at the forefront of customers’ minds.
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