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Automotive Trends

[BizTrends 2016] Dramatic shifts shaping the motor industry

The motor industry is in a challenging time of flux. The industry will change more in the next 10-15 years than it has in the last 50 years. Consumer behaviour is changing to the point that, in the not-too-distant future, demand could move the industry towards revolutionary solutions such as ordering the use of autonomous electric cars during the week and sporty convertibles for the weekends, all from our mobile phones.
Lisa Mallet
Lisa Mallet

In the shorter-term, a depreciating rand and vehicle prices increasing ahead of inflation for the fourth consecutive year, could potentially stunt the adoption of these exciting new trends. But as it is the start of a new year, let's focus on the good.

A new movement in movement

In the next decade car-sharing could become the norm, and car ownership an anomaly. The last 100-plus years have been about the AUTOmobile. The future is about the autoMOBILE. As the consumer trend for instant gratification accelerates, why not get a new car every two years, or couple of months, the same way we do mobile phones?

Having the right car to suit your life stage and household needs is a challenge for many, especially in a society where we finance cars for five years or more. Leasing and finance contracts that offer the flexibility of upgrading or changing your car whenever you need will satisfy the consumer needs, and remove the cost of depreciation. Car companies and finance houses in South Africa have already started offering leases. While the uptake has been slow, leases are gaining momentum as consumers recognise the value of the flexibility they bring.

The idea of car timesharing rips up the rule book and established conventions, allowing a fixed number of customers to share ownership - suddenly an F-TYPE for the weekend is a reality for more people. Why not use your mobile phone to request a personal valet service anywhere you are, or a personal driver whenever you choose?

The future success of car companies will depend on their ability to become mobility businesses, not just manufacturers - while still remaining top-of-mind for consumers. Instead of relying on brand loyalty from customers who purchase vehicles, car companies will have to offer true product innovation and unique value to remain highly recommended. This will have to go hand-in-hand with a revised retail model where consumers can be exposed to cars and experience them, without pressure and in a way that fits their schedule.

Convenience is at the heart of the premium experience. Products and services that are easy to use, easy to choose, and easy to find when consumers need them, are worth paying a premium for.

The electric race

Every automotive brand aware of future sustainability is working on alternative fuels and vehicle propulsion, not only because of changing consumer demands to save the planet and their pockets, but due to the tightening fuel-economy and stricter emissions standards in markets like Europe and the US.

These standards will, of course, ultimately make their way to our shores. And by the time they do, Eskom's load shedding will hopefully have gone the way of lava lamps and bell-bottoms.

Every automotive brand is also in a race to be the first to debut their technology to the world, to be perceived as pioneers and innovators. We have already seen a number of PHEVs (Plug-In Hybrid Electric Vehicles) launch in 2015 and the introduction of more models featuring this powertrain will continue in 2016.

Expect more in 2016, in terms of BEV (Battery Electric Vehicles) that run exclusively on electricity via on-board batteries that are charged by plugging into a power supply or charging station. Also expect the range and the performance of these cars to increase exponentially every year. Acceptance may take a little longer in South Africa, while we still resolve the challenge around EV infrastructure, but globally it is on track to become the preferred option.

[BizTrends 2016] Dramatic shifts shaping the motor industry
©kasto via 123RF

Digital Darwinism

Digital is transforming the world and reshaping industries. Everyone has a supercomputer in their pockets. To succeed, the modern dealership has to be a digital and technology hub. Retailing in today's transparent world with tough competition, rapidly changing requirements, and keeping pace with the tech-savvy, connected customer is challenging. The automotive industry is in the midst of a significant digital revolution that has empowered customers to increasingly manage their purchase process via digital touch points.

Many studies show that the majority of consumers start their research online, visiting multiple brand websites, but only visit one or two dealers face-to-face before making a purchase. Not only are marketing budgets being reallocated in the favour of creating engaging digital experiences that capture and take the customer on a journey, but dealer retailing becomes about going to the customer, and not waiting for them to walk through the door.

Another rising trend across all industries is reviews performed from owners and buyers. It is well known that consumers trust word-of-mouth recommendations, whether from strangers or from friends and family, above all other forms of advertising. It's also no surprise that businesses could start soliciting reviews from all customers, and engage in 'bad reviews' to actively manage reputation, rather than avoid it. However, thanks to social media platforms it has never been easier to find out what people think about your products and use that to drive future product development.

The connected car

No trends discussion would be complete without talking about the trend of the decade: connectivity. This is not new to the motor industry, but in the next few years we will see it become mainstream - a hygiene factor, like Bluetooth and PVR.

Seamlessly integrating our mobile phones with the cars we drive is not only logical, but essential. These devices have become extensions of our lives, tapping into services we use as well as being instrumental in helping us keep in touch through social networks. Manufacturers are wising up to this and now offer a suite of technologies that allow consumers to remain connected while in their cars, with smart interfaces that do not sacrifice safety.

In turn, cars will essentially become smart devices that offer consumers a seamless experience. Whether they are inside their cars or walking around, they'll have access to the same applications they use on their mobile devices. They'll be able to access certain features of the cars from their phones. And while on the move they will also have access to a whole new set of features that enhance the usage and ownership of the car.

Combine all of the above, and the motor industry will see a dramatic shift in the near future. Today's customers buy one car that burns fossil fuel and relies on their mobile phones for connectivity. Tomorrow they'll be able to have on-demand access to mobility solutions that change according to their needs, with smart, driverless cars that boast on-board internet and ultimate convenience during commuting, and the option of enjoying thrilling motoring at their leisure.

About Lisa Mallett

Lisa Mallett is the Marketing and Communications Director for Jaguar Land Rover (JLR) South Africa and Sub Sahara Africa (JLR SA and SSA). With a B.Comm degree in Information Management, a B.Comm with honours in Marketing Management, and extensive experience in the local motor industry, Mallett has helped JLR change its image during a crucial time in its history.
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