The past year has been a bit of a bumpy road for all of us. With new variants of the COIVD virus introduced and continuing to impact our breakthrough from the pandemic, the automotive industry is looking towards 2022 with new hope. Let’s take a look in the rearview and review the automotive industry trends for 2021.
1. The Chip Shortage Isn’t Over.
Concerns regarding a global chip shortage and inventory lows set the tone coming into 2021. While many were hopeful that the issue would resolve itself sooner rather than later, we are still dealing with chip shortages as we turn the corner into 2022. In fact, Deloitte predicts shortages to continue well into 2023. To help resolve the chip shortage, expected investments of $6 billion into the semiconductor industry have risen hopes for a brighter future.
2. Electric Vehicles Continue to Gain Traction.
The UN has formally pledged global efforts to reach net zero by 2050 with many countries signing their support of these initiatives over the past few years. With environmental concerns driving global concern, many manufacturers are looking to fully electric vehicles to help limit the emission of greenhouses gases. More than 100,00 electric vehicles were sold in 2022, proving that the consumer market is also prepared to back the efforts of more sustainable vehicles. Tesla continues to lead the market as of Q3, but newcomers are gearing up for competition.
3. SUVs Remain the Most Popular Choice for Purchase.
Americans love their space and the spike in sales of mid-size and compact SUVs are showing that trend is on the upswing. Recent years have shown a shift away from the family sedan in favor of a roomier option in the form of sports utility vehicles. This category accounted for approximately 50% of all sales in 2021, according to Cox Automotive.
4. E-Hailing is Young, But is Here to Stay.
Ride sharing platforms came into existence about 10 years ago and despite many challenges, it appears to be here to stay. E-hailing has experienced rapid growth and popularity in recent years, tripling between 2016-19. E-hailing accounted for $120-130 billion in sales in 2019. Although the industry took a hit during the pandemic, McKinsey predicts a rapid rebound as we steer out of the pandemic.
5. Connectivity Keeps on Coming.
We are seeing more and more connectivity as AI and machine learning (ML) continue to permeate the automotive market. Many manufacturers are trying to leverage AI and ML to provide deeper connections as part of personal vehicles. This will allow for more capabilities when it comes to safety features, such as lane changing and emergency breaking, and help keep our devices connected in personal vehicles. It’s expected that 96% of vehicles will come with connectivity options built in by 2030.
6. Autonomous Vehicles Aren’t Going Anywhere.
The self-driving car is no longer limited to science fiction. Perforce reports that enhanced autonomy is in the near future, with 38% of automotive software developers stating they are focused on developing a fully autonomous vehicle in 2021. While we don’t expect fully autonomous cars to arrive in the near future, more autonomous features are continuing to arise in new vehicles.
7. Customer Experience Is the Primary Indicator for Automotive Success and Phones Are an Essential Part of that Journey.
In the past, automotive purchases were made based on vehicle specs and developments in engineering. However, with the automotive market homogenizing in recent years, vehicle sales are driven primarily by the customer’s experience rather than features. McKinsey reports that 60% of car buyers under 45 plan to purchase online, making a great experience the key differentiator. Automotive dealers will strive for a positive experience online, on the phones, and in the showroom if they hope to remain competitive.
Here’s to a successful year to come!