The automotive industry is experiencing a rapid expansion, with used cars as one of the major markets.
Just like pre-Covid levels, consumers are considering buying cars again. With digitalization, most of these consumers are now interested in online store purchases.
After people moved online to make almost all kinds of purchases, they are more confident in buying cars online. This trend for online shopping and doorstep delivery has compelled physical auto dealerships to adopt the digital trend.
As the Indian auto businesses are gradually shifting to digital business models, the aim is to cater to a large audience interested in buying cars online, especially in the used car market, and make the car buying journey less painful.
Since the pandemic affected automobile sales globally, the quest to reach the pre-pandemic levels of sales volume persists.
Besides the hunt to reach the pre-Covid levels, what does the future of automotive mobility hold? Here, we’ll discuss what changes can be anticipated in the world of automobiles in the coming years.
“Public transport and shared mobility modes are considered more or less safe again with regard to COVID-19 infection.” – McKinsey
Car ownership was not that common before the pandemic. People were comfortable in sharing public transport but COVID19 changed consumer behavior.
Consumers are focused on owning their vehicles for safer transportation amid the health crisis. Having a personal vehicle gives them a sense of security that they are in a ‘socially distanced transport bubble.’
According to a recent study by Arthur D. Little, “48% of respondents think that owning a car is more important than it was before the pandemic.”
It means that in the post-pandemic era, this trend will keep on rising as the importance of owning a personal vehicle will remain high.
Automotive industry transformation
Consumer demands are changing faster than ever and automotive brands expect to meet these demands with enhanced innovation. This is the era when we connect everything to the internet and you don’t want your car running behind.
Cars are becoming smarter and the integration of smart technology such as AI is something that will witness a huge boom. Be it an advanced music system or Internet-connected engine control unit or sensors, people want more out of cars than just mobility.
Alternate fuel is something that is already changing the landscape of the industry. We are already aiming for 100% ethanol-run vehicles in the coming years. In addition, hydrogen fuel cell electric cars are another trend that is creating a buzz in the market.
This will not only attract more and more customers but will also be a step to sustainable growth.
Electrification of vehicles
With the adoption of smart algorithms in the auto industry, future cars will serve a purpose beyond mobility. Perhaps the electrification of vehicles is already setting the trend, making cars smarter than ever and capable of operating without human input.
Irrespective of its complexity, consumers quickly adopt a technology that makes their life easier and more convenient. This allows car manufacturers to leverage artificial intelligence and make car rides more enjoyable, efficient, and safer.
One would argue, but it is conspicuous how Elon Musk’s commitment to bringing electric cars to the masses proved highly influential and game-changing. It is forcing big automakers to start developing their own electric vehicles (for mass-market).
In a recent study, 51% of US adults say they are likely to consider buying an EV in the next decade, up from 39% in January and 43% in March-April.
Not just that, this year is expected to witness a dramatic increase in the number of electric vehicles on the US market – from around 62 models available at present to 100.
Besides the rising demand for EVs, pure electric vehicles will play a central role in achieving the ambitious objective of zero-emission targets set for 2050 (for India, it’s 2070), and almost all the industry leaders are gearing up for it.
Amplification of vehicle security
With technological advancement, cars are expanding the horizons of mobility. ADAS (advanced driver assistance system) is one of the most promising technologies in the vehicle industry.
Today, a very small percentage of cars come with ADAS (Advanced Driver Assistance Systems) such as adaptive cruise control, emergency braking, collision warning, etc. However, the ADAS market awaits an enormous rise in 2022 and years ahead, considering its potential to reduce accident fatalities.
According to research, the integration of ADAS features in passenger vehicles has the potential to avoid almost 40% of all passenger-vehicle crashes, 37% of injuries, and 29 percent of deaths in crashes.
The carmakers like Mahindra and MG have publicized ADAS in recent weeks in the Indian market. They have also made it more affordable for price-sensitive consumers.
The trend is making inroads in the Indian market as manufacturers are eying the mass market and have a lot of potential to make the roads safer over time.
Hyper-personalization in the digital world
Since the pandemic, the consumer’s buying behavior has changed drastically and businesses are adopting this shift to survive in the current times.
With the rise of digitalization, the trend of doorstep delivery has become mainstream for grocery and consumer goods; however, large purchases like vehicles will also witness this trend in the coming years.
Auto dealerships and businesses are adopting the D2C model to cater to their consumers directly.
The adoption of digital sales and the direct-to-consumer model will witness a huge spike in 2022 owing to the number of purchase decisions made online. This will further encourage auto dealerships to switch to online mediums and sales.
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The automobile industry will witness a huge shift in the next decade than it has in the past century. Vehicles are becoming smarter, and safer and ease of driving will hit the next level over time. Also, people will be more likely to switch to different cars often.
Rather than owning a vehicle with depreciating returns, many consumers are opting for a short-term subscription to a particular car. This way, a single car can have multiple owners for a short duration of time – making it highly affordable and convenient.
“The mobility of the future will be much easier, more flexible, and more individual for users. The vehicle of the future will be used on-demand with shared ownership,” – PWC
Carmakers say that subscription-based car ownership is not for regular consumers. This concept is for the people who don’t want the hassle of buying and selling a car every two or three years and for those who don’t have enough to spend on a car.
This kind of subscription will be popular among the people who move out of the city for long-term assignments. It will save them from the hassle of buying a new car while allowing them to own personal mobility.
Used car market growth
From preferring doorstep delivery of groceries to personal mobility, the pandemic evolved consumer behavior.
With the increased number of people favoring personal mobility over shared vehicles and diverse finance options available in the used car market, the market will grow significantly.
The used car market is red hot as more and more car manufacturers are joining this bandwagon, to make buying and selling cars hassle-free and efficient. Used car dealers need to up their game in order to drive sales growth.
Along with the demand for used cars, the prices are going crazily high. This trend might continue in the future until car manufacturers don’t keep up with the demand for new cars.
Chip crisis and the supply chain problems persist, making it challenging for the manufacturers to meet the demand.
As a lot of car buyers are turning to online used car sales platforms for their next cars. Therefore, it becomes imperative for dealerships to have compelling digital catalogs.
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