The automotive industry has evolved more in the last ten years compared to the last 100. Many ground breaking inventions so far were introduced in the area of safety: the three-point seatbelt, ABS, airbags, and many more safety technologies that were introduced by various manufacturers were eventually standardised across the industry.
The last ten years have been a decade of major shake ups that have seen brands embrace alternate propulsion technology, start developing autonomous vehicles, renounce private ownership in favour of ride-sharing, and opt for leasing rather than buying.
Going ahead, it will be instrumental for car companies to know which trends have the potential to reshape the automotive industry. The opening up of new markets, imminent demise of certain automobile segments, proliferation of data, and lots of other factors have pushed the industry on a completely new path.
R1S from Rivian, a firm backed by Amazon and General Motors is a sign of things to come in the automotive industry.
Multimodal and shared mobility
First off is the rapidly ballooning business of ride-sharing pioneered by companies like Uber and Lyft. By introducing on-demand transport, such firms have made personal transport seem redundant. Uber is also working towards putting robotaxis on road as well as fully autonomous trucks on highways. These new approaches are sure to bring down private sales for automakers even further.
New areas are being marked out as places that do not need manned vehicles for smooth operation. For instance, Volvo has developed an autonomous load hauler called Vera that provides last-mile cargo transportation services. Employing such vehicles at dockyards, warehouses and cargo hubs play against truck manufacturers’ domain.
The automobile industry is experiencing a transition the likes of which has never been witnessed before. From standardising electric car charging technology, to co-existing with non-automotive brands, to marketing cars as commodities with little aspirational value, a few well-timed trends have managed to reshape the landscape for carmakers. How to take an automotive business forward in such a volatile scenario?
Demise of the sedan
At the time of its introduction, the sedan was perceived as an automobile with the perfect body style. Four doors, long hood, and spacious trunk meant that it was versatile and stately. The traditional three-box lent itself well to different interpretations. All carmakers could design their own unique sedans and equip them as market trends dictated.
The so-called world’s first MPV arrived to disrupt the automotive industry, snatching away the aspirational value attached with sedans in favour of increased practicality. The Toyota Picnic led a wave of new crossovers and MPVs to a level of success that global carmakers have had to sit by and watch the sedans losing their erstwhile popularity.
One of the major carmakers particularly affected by the MPV charge was Ford. Its first global sedan, the Mondeo, met an untimely end due to the advent of crossovers. It didn’t matter that it was built upon a formula that had brought massive success and handsome revenues for Ford. Today, Ford has announced it will stop producing almost all sedans in its lineup and focus mainly on SUVs and crossovers.
A successful formula rendered obsolete due to an unforeseen trend, the Ford Mondeo was one of the first victims of the crossover revolution.
Cars as commodities
Consumers are increasingly being encouraged to view cars as they would public transport. Instead of buying, lease. Instead of driving out, hail a cab. Instead of driving just one car for years, drive a new one every week or month. Instead of driving yourself, let the car do it. New thought processes have opened up the gates for non-automotive firms to enter the industry. Should traditional carmakers rebel or co-exist? What would co-existence entail?
A few firms have already noticed the wind of change in the industry and are preparing for the future. Volvo’s 360c autonomous concept showcases the car as a modular space on wheels. Configurable to suit different purposes, Volvo says the concept has the potential to replace air travel in the future.
BMW recently came up with a new commercial showcasing its Vision iNext autonomous EV, which supposedly unlocks more “moments of joy.” Lexus has floated subscription services under which customers can drive any vehicle from the firm’s lineup for a fixed monthly or annual membership plan.
Why own just one car when you can lease as many as you want? Lexus is operating pilot subscription programs with a view to full-scale expansion in various countries.
Tech giants like Amazon and Google have entered the fray, with the latter working on robotaxis for urban commutes. Waymo taxis have already undertaken more than 6,200 trips to earn valuable customer feedback on autonomy. Amazon invested a huge sum of money in EV startup Rivian, along with General Motors. Where the investment will lead the trio is unclear, but it goes to show that the automotive market has been blown open to every player having the wherewithal to compete in the industry.
Data, V2V, and V2X
After changing the social fabric across the world, internet is now being applied to cars, resulting in one of the biggest revolutions in the industry. Data and advanced software together are making machines smarter, generating a cohesive network not limited to cars. Vehicles are capable of communicating with each other (V2V), nearest traffic lights or emergency services (V2X), and receive updates to their software over-the-air directly from manufacturers.
The proliferation of internet has led to creation of data. Right from vehicle conception to sales, data is being gathered, interpreted and acted upon in the pursuit of customer satisfaction, trend prediction, and various other purposes. Data is one of the pivotal aspects of industry intelligence which can unlock insights for you that were hitherto invisible.
With climate change fast becoming a crucial aspect to consider in the industry, world governments are pushing carmakers to develop clean-energy platforms for cars. At the very least, internal combustion platforms are being squeezed to eke out the maximum performance and lowest possible emissions.
The age of electric cars is upon us. Until we develop an effective method to store volatile gases like hydrogen for long periods of time, hydrogen fuel-cell cars are sometime away. With EVs gaining increased acceptance, the need is more urgent than before to set up a substantial charging and battery disposal network across the world.
One of the factors pushing carmakers to go electric is the new-generation consumer. The consumer of today is concerned less about an automobile’s performance or practicality proposition, focusing more on the impact it could have on the environment. Although it is a good direction for the industry, time still needs to be invested to develop truly effective solutions to this modern challenge.
These are just some of the trends reshaping the automotive industry. While some have been brought on due to modern times and requirements, some trends have caught on due to disruptions in industries hitherto not related to automobiles. It will be interesting to see how new influences and ideas contribute to shaping the automotive industry of the future.