The last five years have seen several technology driven changes in the automotive sector. A new set of players have emerged who are responding to the changing consumer behavior and market trends. Today the economy is on the upward surge and has recovered considerably as compared to the past few years. This has led to improvement in the consumer spending as credit is more easily available. This portends good tidings for car manufacturers.
Factors that have transformed the automotive sector
- Fuel price: The fuel prices fluctuated over the past few years before seeing a low this year. This is an encouraging sign for the consumers and the manufacturers as more and more people will start to invest in a vehicle of their own.
- Electrified vehicles: What a few years ago were considered not viable and totally impractical has now slowly made its mark in the auto world. The electric cars have started operating in several parts of the globe and it is a matter of time before they are in vogue.
The stricter emission rules, the lower cost of batteries and the availability of charging ports everywhere are factors that work in favor of electric vehicles an against the traditional fuel driven cars.
- Car sharing, car pooling and e-hailing: The concept of sharing a cab and hailing a taxi using a smartphone was slow to start but has now revolutionized the way you travel and hire a cab. People have started to e-hail taxis, car pool and share cabs to cut costs and also to escape parking woes. This trend has affected the traditional taxi system and is bound to disrupt the sale of cars too. In fact the annual growth rate in car sales has dropped from 3.6% in the last five years to 2%.
- Multiple modes of transport: With cities becoming increasingly crowded and parking spaces far less and exorbitantly expensive, people are resorting to public transport and other methods to procure goods and services. Thanks to modern apps now you can have these essentials delivered at your door step. As a result the need for an own vehicle is reduced considerably. This scene is more pertinent to the cities, while in the rural areas the car is still the most preferred mode of transport.
But all is not bleak.
New business models portray a surge in the growth of car sales especially the crossovers which are the most preferred mode by young cool explorers. Furthermore, manufacturers have realized the importance of integrated infotainment systems. As technology has become an integral part of our lives today and the focus is on instant response the upgraded infotainment systems can send SMS, answer emails without compromising on your safety. These upgrades are sure to lure back people to driving their own cars.
Finally, the advent of fully autonomous vehicles which are already a reality in industries can have far reaching effects on the economy and related industries. Once these cars become commercially pliable company sales supplies will be affected, car insurers will start insuring technical knowhow. The benefits as of now seem aplenty but only time will tell how feasible these vehicles will be.
These are exciting times for the automotive sector as already established players and the newbies are trying to compete with each other. As they vie for consumer support they are also coming together to face the common enemy in the form of depleting fuel, alternates for fuel, emission issues, cyber security and data privacy among others.