Six key trends driving the auto industry
During the past four decades, change in the auto industry has been slow but steady. But in the past, say, five years, the rate of change has accelerated. It’s exciting (and a little daunting) to be working in an industry where new developments and innovations are happening so rapidly.
After my visit to the 2017 Canadian International AutoShow (which set an attendance record at 339,590 visitors), it got me thinking about the changes that are affecting our industry. Here are six automotive trends, based on my experiences. 1) On-board technologies.
Emergency warning systems, video recorders, Apple CarPlay and GPS navigation systems are among the integrated technologies being manufactured into today’s automobiles. Many of these on-board technologies are intended to enhance safety while many are information-based and will alert drivers (and dealerships) when technical or performance issues should be addressed. 2) Electrified vehicles. Vehicles powered by hybrid, plug-in, battery-electric and fuel-cell technologies have been slow to gain mass acceptance in Canada and the U.S., but that is expected to change over the next five years. Lower battery costs, a wider network of charging stations (alleviating range anxiety) and government incentives will make EVs a more viable transportation option for consumers.
3) Collaboration. The race is on for automakers to develop autonomous vehicles, GPS mapping systems, telematics, network security and other functions. The key to success in these areas is collaboration. In the past two years, most major automakers have announced partnerships (or investments in) leading technology companies. Honda is working with Google, Volvo is working with Nvidia, General Motors has invested in Lyft (the ride-sharing company) and Toyota has partnered with Microsoft. In the coming years, I also expect to see new collaborations among automakers, as the cost of producing new automobile technology continues to rise (i.e., Toyota and Tesla recently opened up their
collections of patents for alternatefuel vehicles). 4) New materials and data collection. Formula One racing has a long history of introducing new technologies into passenger vehicles. Braking systems, hybrid engines, lightweight carbon fiber materials and energy recovery systems were pioneered in Formula One cars and eventually became standard features on automobiles. Even the collection of real-time data - commonplace on race cars - has been adopted by auto manufacturers to better understand how their products perform. This trend of race car technologies affecting passenger cars is as strong as ever, and it will continue.
5) A new generation. Not only have car buyers become more savvy in how they purchase vehicles. Dealership employees, too, have adapted to changing marketplace realities. A new, educated generation is entering the retail automotive workforce with incredible skills and ideas. This has enabled dealerships to better understand their customers, communicate more effectively and provide improved customer experiences. Opportunities for a fulfilling career in the retail automobile industry have never been greater.
6) Brand loyalty. Prior to the 1990s, brand loyalty in the auto sector was a given. If your parents drove a Ford or a Chevy, chances are you would drive the same, as would your children, and so on.
But increased competition has led to new innovations and brought about a level of parity in quality among automakers. With so many manufacturers offering so many well-engineered vehicles across so many segments, sticking with a single nameplate because of tradition is no longer a sure thing for car buyers.
As a result, many consumers now base their car-buying decisions on a range of items, such as auto reviews, consumer ratings, fuel economy, recommendations from friends, brand reputation, etc.