There is no doubt that the automotive industry landscape is changing quickly. The future is now. Changes are being driven by the development of emerging markets, the rapid and continuous evolution of digital technologies, consumer preferences around ownership, and the need for more sustainable practices.
Now more than ever, the automotive industry needs to adopt new business models to embrace these changes, with a view of delivering exceptional customer experiences across the entire customer lifecycle rather than remaining operationally siloed and product focused.
In this article, we’ll explore the five key trends that are shaping the future of the automotive industry and how OEMs and dealerships will need to position themselves for maximum impact:
1. Electric Vehicles
Globally, governments are beginning to introduce more stringent regulations and attractive incentives to accelerate the adoption of electric vehicles (EV), to support targets for reducing carbon emissions. Sustainable mobility is the future with predictions of global sales of EVs rising from 6.6 million sold in 2021 to 21 million in 2025.
The rise of EVs mean reduced dealership visits for vehicle owners and possibly reduced aftersales profits for dealerships, due to less frequent service
maintenance requirements and fewer parts to replace. However, for proactive OEMs and dealerships, it brings new competitive advantages that can grow aftersales and brand loyalty.
EV owners expect technology to be at the centre of their dealership experience. Dealerships need to invest in specialised equipment and software technology to appeal to these tech savvy, carbon-conscious customers who expect a seamless and convenient experience.
2. Connected Cars
With consumers spending more and more time in their vehicles, it is important to shift the focus from product to customer experience. Vehicles will be more than just a mode of transport, it’s a ’connected hub’ with in-car entertainment and advanced technology that generates terabytes of data each day. As connected driving increases, connected car data volumes grow exponentially.
OEMs and dealerships who best implement and utilise connected car data and strategies will become the future leaders in this space. However, OEMs face challenges in analysing and leveraging connected car data to improve the service lifecycle and connect with customers. To get ahead of the fame, they will need assistance from credible data partners with global aftersales expertise.
3. Dealership Agency Model
Consumers are already used to direct sales with manufacturers in other industries – think Apple or Miele for example – and are calling for the automotive industry to adapt. According to Automotive News Europe, more than 80 percent of consumers say they prefer fixed prices and a simple buying process similar to the experience they are used to from e-commerce, which includes the option of new kinds of car ownership.
The shift to agency model presents plenty of opportunities over the traditional dealership model for OEMs, dealerships and customers. OEMs will be the ones selling vehicles directly to customers, so they will
have more visibility and control of the entire customer journey. On the other hand, dealerships will transition to being brand experience hubs. They will need to switch focus from selling new vehicles to servicing and delivering outstanding customer experiences.
OEMs and dealerships will need to work closely and share valuable data to provide a seamless customer experience at every touchpoint. New technology investment will be required to streamline the customer lifecycle, with a shift to a more digital-focused, omnichannel experience.
4. Data-driven Marketing & Customer Experience
Data-driven approach to marketing is enabling 1:1 person-based, relevant communication at all stages of the customer lifecycle. This means OEMs can now connect with the customer from the moment of search, through the buying process, all the way through to each key stage of servicing and upgrades. As connectivity continues to progress, this will be more and more pivotal for delivering the right information, at the right time, to the individual no matter where they are in the world based on their personal preferences and requirements.
A good example of this was shared by our CEO, Jens Monsees in his recent interview with Automotive News. Think for a moment that a customer is experiencing the change of season. It is turning from autumn into winter in the northern hemisphere, with the onset of cold, frost and snow. The driver’s connected vehicle would then alert and remind the driver that they’re still driving with summer tyres and provides a recommendation to change to winter treads. The vehicle knows the route the driver takes to work each morning, so provides the information on the dealership located closest to the route. The dealership will also be provided the information following an online appointment made by the driver at the time, and can prepare for the visit in advance, ensuring there is no delay when the driver arrives. Billing is made online and the process for the change of tyres is smooth, convenient and the driver is satisfied with a good experience.
This personalised, data-driven marketing will revolutionise the automotive industry and those who adopt these business models first, will lead the way.
5. Fragmented Market
Siloed technology solutions across the retail automotive ecosystem makes it difficult for OEMs and NSCs to plan and deliver consistent customer experiences. OEMs and dealerships lack 360-degree view of the customer and the customer experience varies greatly across each touchpoint.
The future is about streamlining the customer experience and pulling all of this together, so that the brand experience that is designed by OEM is expressed throughout every channel, to ensure maximum impact on the customer. OEMs and dealerships generally lack consistent customer insights to drive dealer efficiency and customer retention programs. Innovation through data-driven insights and technology will support this as we move into the more connected future of automotive.
The Path Forward: Empowering the Data-driven Automotive Ecosystem
The structural shifts in the automotive industry provide growth opportunities, beyond the traditional new vehicle sales and aftersales segments. As the automotive industry rapidly evolves, enabled by advanced vehicle technologies and digital lifestyle convergence, industry participants are jostling to secure their positions and to gain their share of this growing market. As an established, reputable and trusted global partner to both OEMs and dealerships, Infomedia is well positioned to help capitalise on these trends in the years to come.
OEMs and dealerships need to consider a solution ecosystem that allows customers to engage with the brand seamlessly, both online and offline. Our new vision and positioning of “Empowering the data-driven automotive ecosystem” supports this. We’ve enhanced our SaaS and DaaS solutions to enable consistent, measurable and profitable solutions across the full vehicle and customer lifecycle.