Technology is rapidly changing across the auto industry. Changing consumer behavior, new insurgents, and digital acceleration are all uncovering new challenges and opportunities for brands that have long dominated transportation.
The transportation landscape is evolving on nearly every front, with brands and policy-makers reacting quickly to create better and safer consumer solutions. In this snapshot, we’ll examine the primary drivers of change at the forefront for automotive companies.
Vehicles Are the Next Platform
Today, the primary changes in the auto industry are being defined by software. Mobile technology is empowering the rise of mobility-as-a-service and changing the way consumers view transportation as a whole. As vehicles become software platforms, digital security is quickly becoming a point of fear for consumers. Auto companies are trying to reorganize and react to the need for persistent software innovation.
Primary Challenge: Auto companies must now view themselves as digital companies creating systems for consumers to interact with the auto platform.
“People below the age of 30 are much more likely to identify with their mobile and computing devices than the cars.” — Arun Sundararajan, professor of information and management sciences at New York University
Surge of Multiplicity
Consumers are migrating away from the view of their vehicles as the singular form of transportation. The ubiquity of on-demand options coupled with an increasingly urban population is fueling the multi-modal movement. Many point to the waning dominance of private vehicle ownership. Interestingly enough, shared-mobility may actually boost auto sales.
Primary Challenge: How will companies react to the consumer movement away from private ownership toward a multitude of transportation opportunities?
Revolutions in The Purchasing Process
Consumer purchasing behavior is changing as a result of the vast buying information readily available. The automotive retail experience is shifting within the sales cycle. Much of the customer journey now takes place outside the dealership walls. Mobile technology is opening new avenues for brands to provide education and services at key moments in the purchasing process. The dealership itself is quickly becoming the culmination of micro-moments leading to ownership.
Primary Challenge: How can companies create innovative products to provide consumers with a seamless experience across the buying process?
“The market economy will prevail and market forces will adjust the price. It’s not whether dealers welcome it or not, it’s whether they’re willing to adjust with the times.” — Max Zanan, CEO of IDDS Group
Autonomous Vehicles Loom Large
Nearly every major automotive company has made a move in the last year to position itself in reaction to self-driving vehicles. Autonomous vehicles will most likely arrive first as industrial fleets. The shift toward self-driving vehicles is powering many economists to look toward the paradigm shift where the automobile becomes an extension of the office and home. Self-driving vehicles may unlock enormous latent productivity in the modern workforce.
Primary Challenge: Companies must navigate the uncertainty of autonomous adoption and regulation while committing strongly to the imminent future of self-driving vehicles.
A New Horizon
The massive changes on the horizon for the auto industry should be met with tenacity and enthusiasm, rather than apprehension. In sum, the technology is creating massive opportunities for automotive companies to meet new consumer demands and build products and services to more seamlessly solve the fundamental human need of transportation.