The automotive industry is constantly changing and the COVID-19 pandemic has undoubtedly shook things up immensely and will likely continue to do so in the short and long term. Automakers, dealers, and consumers are rethinking the processes of making, selling, and buying cars, which will drive changes in consumers and force automakers and dealers to adapt effectively.
Digital enhancements
There is no doubt that consumer preference for online and digital retail and communications has increased over the past couple of years. New car manufacturers usually have state-of-the-art websites with the latest graphics and features, which appeals to consumers, especially younger ones. Traditional automakers will need to follow suit and strive to keep their ads, websites and communications up to date with the most engaging and interactive digital capabilities.
Dealerships should also take note of the benefits of having the latest technology on their websites, as features such as 360-degree vehicle views, video chats with salespeople, and an accurate “sort” function so customers can find the exact vehicles they want have proven invaluable throughout the pandemic. The ability to complete F&I paperwork virtually rather than at a dealership was also a popular offering.
Of course, in order to make digital improvements, automakers and dealers may want to partner with or invest in tech companies (or even other automakers) that will give them access to technologies they don’t. may not own themselves.
Transition EV and AV
The strong thrust shift towards electric vehicles (EVs) has continued during the pandemic, and automakers will need to adapt as supply chains and production return to pre-pandemic levels. Fuel prices have reached record highs during the pandemic, leading more consumers to consider at least one electric vehicle, and there is also a growing desire for increased sustainability. While electric vehicles are typically built with fewer parts overall than gasoline-powered cars, automakers will need to find ways to meet an increased need for more sufficient battery production.
Of course, the shift to electric vehicles will also require automakers to hire new talent and/or train their current employees in the latest electric vehicle technologies. Building and maintaining electric vehicles is quite different from gasoline-powered vehicles, and automakers may need to hire more software and electrical engineers and fewer mechanical engineers.
Automakers have generally had to slow down the development of autonomous vehicle (AV) technologies to save money and focus on other hurdles throughout the pandemic, but those could resume once the chains d supplies are stabilizing and automakers have the money (and the semiconductor chips) to continue AV programs. However, the extent to which automakers emphasize audio-visual technologies will likely depend largely on consumer preferences. For now, lower vehicle costs and more attractive electric vehicles seem to be more on their minds than audio-visual technologies.
Potential increase in car buyers
We also don’t know if the carpooling, public transport and public transportation will return to pre-pandemic levels. Use of these services dropped dramatically during the pandemic as consumers became more fearful of the virus and others began to work from home, and if this shift continues there is the pressing question of whether whether or not individuals buy their own car instead.
Additionally, a study of Enter it at the start of the pandemic found that more young people wanted to buy their own car. If so, automakers may want to focus on building cars that are more appealing to the younger generation. Either way, getting back to a point where there is sufficient supply should be a priority for automakers.
Possible future obstacles
While the chances of another global pandemic are (hopefully) very slim, we learned that many industries – including the automotive industry – were unprepared for such a catastrophe. Parts, materials and other supplies dwindled as manufacturers closed factories and couldn’t keep up. Streamlining procedures and cutting costs to save money may have helped some automakers learn more efficient and cost-effective processes, but being thrown into the unforeseen crisis was not preferable.
Automakers will no doubt want to have a better plan in case of other unforeseen circumstances, which could include challenges caused by geopolitical tensions beyond their control. Taking action may include sharing greater transparency within their supply chains, which would give them better knowledge of their suppliers’ inventories and procedures. This, in turn, can reduce and prevent risk. Overall, better crisis management and a better response plan can minimize the impact of any future obstacles, no matter how big or small.
Did you enjoy this article? Please share your thoughts, comments or questions regarding this topic by contacting us at newsroom@cbtnews.com.