The vehicle or automotive industry’s landscape has been evolving at a very quick pace lately. Emerging markets, integration of digital technologies, and new consumer preferences all play a role in the industry’s changes. Because of these factors, a car dealership must use new business models so they can greet upcoming changes, and adapt to them.
In this article, you’ll learn about some of the key trends and changes in the vehicle market. We’ll cover them all in detail.
What New Business Strategies Are Now In Use?
Before we head over to the trends and changes, let’s talk about some of the business strategies first. These days, businesses such as car dealerships or second-hand car dealers need to employ new tactics to ensure consistent sales. These new tactics have the potential to streamline lengthy processes, benefiting both the dealer and the buyer.
Here are some examples of business tactics that are being increasingly adopted in these types of establishments:
- Incorporating Auto-Financing Software. To speed up the purchase of cars, a car dealership or any similar business now use auto-finance software. This tool will streamline the buying process. Auto-Finance software also provides options for buyers to make easy informed decisions.
- Digital Retailing. Digital retailing allows shoppers to clear most of their transactions online and can complete them inside the dealership. For example, if a customer buys a second-hand car from a dealer of used cars in Bradenton, FL, they’ll clear most of the transaction processes online through either the dealer’s website or the app and complete it upon their visit to the dealership.
- Reducing Paperwork Time: Dealing with paperwork can be tedious for both the buyer and the dealer due to the time it takes to be cleared. Luckily, a car dealership can now utilize up-to-date tools like CRMs and digital financing to cut down on time spent with the client.
New Trends & Big Changes in the Auto Industry
1. Introduction of Electric Vehicles into the Auto Market
The introduction of electric vehicles has recently emerged as a trend in the global auto market due to their environmentally friendly alternatives to fuel-powered cars. To further back that up, some governments in the world are starting to advocate the use of these electric-powered cars.
The impact made by the electric vehicles is also felt in the Auto Industry, specifically in car dealerships. Dealerships have a mixed stance on the rise of electric-powered cars. On one hand, they’ll receive less post-purchase revenue since electric-powered cars aren’t too demanding in maintenance. On the other end, car dealerships see it as a new opportunity.
There are some consumers that are turned off by the exhaust fumes created by conventional cars and dealerships can leverage this to their advantage. Dealerships are likely to add electric cars to their inventory and market it to that audience. Sooner or later, that target audience will be flocking to their car dealership due to the addition of electric cars in their inventory.
2. Vehicles with Connectivity Features
Connectivity features represent another rising trend among modern vehicles. Vehicles can now link up through the internet or the cloud to retrieve data and information. The connectivity features can also be used in interacting with various elements in the proximity of the car.
- V2N / Vehicle to Network: This enables vehicles to link up with cell tower networks, connecting with other vehicles or infrastructure within the vicinity. Through this connectivity type, your car can receive notifications and even link up with nearby 5G data centers.
- V2V / Vehicle to Vehicle. This is a form of real-time communication and exchange of data between two or more different vehicles. It’s like forming a small network and each car is acting like a network node. They can send, capture or transfer signals to one another.
- One excellent usage of V2V connectivity is to notify nearby drivers of incoming road hazards or tight turns in the road.
- V2C / Vehicle to Cloud. This connectivity type allows the car to link up to the internet and store or take data from the cloud. The most common example in this situation is when the car’s operating software decides to download updates.
- V2D / Vehicle to Device: This type of connectivity transforms a modern vehicle into more than just a mode of transportation – it also doubles as an entertainment hub. The car can link up with any smart device such as stereo systems and screens allowing it to play music or movies and clips.
- V2D / Vehicle to Pedestrian. V2D connectivity involves the use of camera systems built into the car to create collision warnings or notify the driver of incoming pedestrians. This type of connectivity is still contentious as drivers might prefer using smart sensors instead to avoid collisions and detect pedestrians.
- V2G / Vehicle to Grid. This is also a new form of vehicular connectivity. It allows cars to exchange data between hybrid and electric cars so they can electrify a transport vehicle. Outside of that purpose, this connectivity aids in optimizing electricity usage.
- V2I / Vehicle to Infrastructure. The last type of connectivity exchanges data between vehicle and road infrastructure. An example is the exchange of data between road signs and traffic lights with smart sensors to a vehicle with connectivity features.
3. Shifting to a Dealership Agency Model
The shift to a dealership agency model means that Original Equipment Manufacturers (OEMs) will now directly sell vehicles to customers. The intent behind this is to have improved visibility and control over the customer’s journey in the buying process. Meanwhile, a car dealership will need to transition into a brand experience hub.
What this means for dealerships is that they’ll focus more on providing service to retain clients. Nonetheless, both OEMs and dealerships need to coordinate by sharing valuable data. The data they gathered from customers can be used to improve customer satisfaction.
4. Data-driven Approaches & Optimizing Customer Experience
Speaking of data, data-driven marketing is affecting significant change in the automotive industry, streamlining the purchase process for new cars. What happens here is that the Original Equipment Manufacturer will link up with the customer once they start browsing through their inventory of vehicles.
The OEMs guide them through each step of the purchasing process. While the process is being conducted, they are also gathering information about the customer. The information that the OEMs usually extract from their customers is their personal data and preferences.
Both OEMs and dealerships can analyze the information they gathered so they can personalize the purchasing experience.
5. Self-Driven Cars
Another type of futuristic vehicle is on the horizon and it’s none other than the self-driving car. These cars rely on a combination of cameras, GPS, and AI to travel between destinations without your assistance. The main intention behind the invention of self-driving cars is to reduce vehicle accidents and deaths.
Self-driving cars can also be beneficial for drivers with handicaps or physical limitations. Furthermore, since the vehicle operates autonomously, commuters can engage in other activities while en route to their destination.
The Auto Industry Rolls Forward With Trends and Changes
The Auto Industry will experience huge transformations once these trends and changes have hit the scene. These transformations range from the advent of electric cars and self-driving vehicles to the emergence of new business models for dealerships. All businesses in the auto industry must adapt to and implement these new trends and changes to thrive and succeed.
Also, these trends assist these businesses to personalize and adapt a customer’s car buying experience. It will also make their brands stand out even amid the Auto Industry’s ever-changing environment.
