5 Automotive Industry Trends Which Will Put Pedal to Metal

A new technological decade has unfolded, and businesses are gearing up to keep pace with the emerging trends and evolving user requisites of this era. Industry giants are claiming to have their strategies in place, in order to mitigate any risks which the year 2013 may pose. But are all industries indeed ready?

As of March 2013, the US automotive industry has recorded a sale of 3,689,089, but will the pace be maintained throughout? Are mobility firms prepared for the next decade? In order to determine this, automakers will need to keep an eye in the emerging trends of the industry and adopt them into their business models. Here are 5 key trends which every mobility firm must be mindful about as it strategizes for the upcoming financial year.

Governments will regulate the need for safer and cleaner transportation. As far as secure individual mobility is concerned, governments are currently focusing on three core areas- environmental compatibility, preservation of resources and safety. This will prompt original equipment manufacturers (OEMs) to render a diversified range of safer and cleaner vehicles, especially zero-emission transportation. While, consumers will weigh their vehicle-buying decisions based on penalties and incentives at their disposal.

New players will set foot in the automotive sector. The evolving consumer needs, introduction of Automotive IT solutions and advancing technology have paved way for new entrants to set foot in the mobility market. Even non-automotive firms are rendering services like mobility integration, car-sharing and ‘black box insurance’ based on usage, which decides the premium limit based on electric vehicle integration, real-time evaluation of driving performance and advanced car entertainment systems. The evolution of these new business models will allow the new players to become an integrated part of the traditional automotive value chain.

Automotive marketing will get an edge with social media initiatives. The marketing trends in the automotive industry have witnessed a major shift. From showcasing a gleaming car in a 30-second slot, the means of marketing have become more social. Lately, consumers have been doing a thorough research before deciding upon which vehicle to invest in. Social media platforms have facilitated the access to a plethora of information, including perceptions and opinions of other consumers. Buyers are resting their decisions on reviews which they acquire from influential blogs and websites, other consumers and news features- sources on which the mobility firms can’t exercise any control. At the same time, OEMs are harnessing social platforms to develop closer bonds with consumers. They are adapting to the paradigm shift and utilizing it to market their products to a wider audience base.

OEMs will look forward to rationalizing their portfolios. Post surviving the recession blues, most OEMs will shift their focus from volume to sustainability and profits. Emerging OEMs will look forward to climbing up the scale as soon as possible, by either acquiring in their home market or eyeing the developed nations, in order to build a global presence.

Globalization of the sector will result into emergence of new risks. Globalization is paving way for new risks and OEMs are continuously devising radical operational strategies in order to mitigate these risks. Whether it’s the volatile prices of raw materials and misalignment of demand and supply, or it’s the shortage of qualified workers and changing regulatory prices, automotive firms are facing a reality check pertaining to their globalization efforts. In the wake of these challenges, industry must gear up to implement mitigation strategies in order to simplify the adaption of the value chain. And implementation of automotive software solutions is being viewed as one of the prime solutions to these challenges.
Planning is the key to success in the times to come. The automotive industry needs to study the evolving trends circumspectly and prepare their business strategies accordingly.

Will the Electric Car Cause a Power Shift in the Automotive Industry?

There was a big imbalance created in the automotive industry, as the Western world’s automotive industry came under serious pressure due to some car manufacturers management and the economy. In the same period, the Eastern world started to manufacture a lot more cars, which were cheaper because the Eastern world’s labor costs are much cheaper than the rest of the world. The reason why they have cheaper labor is due to the massive labor forces they have available.

At the same time, the Eastern world tackled their quality problems by head hunting highly skilled automotive engineers from the Western world. This caused a massive brainpower wave between West and the East. This brainpower shift caused the amount of high quality cars that gets manufacturer in the East to increase massively.

The Eastern countries even merged with some of the world-renowned car manufacturers. Some of these world-renowned manufacturers decided to open their own plants in the East. This wave in the East came like a tsunami, which could not be stopped, this caused the competition to became fierce between East and West.

Predictions are that the East is going to overpower the West in the field of car manufacturing, due to their massive labor force. These labor forces combined with the highly skilled automotive engineers they have head hunted from the West cause them to be a force to be reckoned with.

This whole paradigm shift will cause that the East and Japan to join up and Japan is already a reckoned force in the motor industry. There are predictions that new electric cars will also come out of the East as Mr. Warren Buffet bought some shares in a big company by the name of “BYD” in China who plan to tackle the electric car industry, “BYD” stands for “Build Your Dream”.

All the major players in the automotive industry are busy developing electric cars, even in South Africa there is a company developing an electric car. This will cause a power shift on its own in the automotive industry, as electric cars will replace conventional cars very soon. Predictions are this will happen far quicker than most people realize. Let us not be skeptical about it and look forward to all these power shifts, which may come in the future and hope it will be good for the greater good.

Rocco van Rooyen is an Author on Automotive Solutions. As an Entrepreneur running his own automotive repair shop for the past twenty years and Author on the subject, he is at the forefront to provide solutions to all automotive related problems.

The Automotive Industry and Global Trade

In the United States, one city is typically synonymous with the automotive industry. It’s challenging to think of an American made car without thinking of Detroit, Michigan, and in recent years the financial trouble the automobile giant has endured. Though foreign manufacturers in Japan and Korea have gained strength and drivers in the US, it doesn’t necessarily mean US automakers are done. MSNBC reported in late 2011 that the Big 3 in Detroit – Chrysler, Ford, and GM – enjoyed a nearly 30 percent increase due to a demand in sports utility vehicles and trucks.

Quick Facts About the Automotive Industry

Since 2000, an average of 48 million passenger cars alone have been manufactured annually around the world.

According to Worldometers, China produces one of every four new cars, and more than half of all cars are produced in Asia and Oceania.

Of the approximated one billion passenger cars on the road around the world, close to 25 percent of them are registered in the United States. (Source: International Organization of Motor Vehicle Manufacturers)

According to Businessweek, the top selling car in the world is the Toyota Corolla, with sales of well over 35 million.
Major Exporters of Automobiles

While China is one of the world’s largest producers of passenger vehicles, the country is not necessarily ranked high among top global exporters. The International Trade Centre recently put out a report on top automotive exporters, with the following leading the pack:

Germany – The roots of the German automotive industry date back to the late nineteenth century and the various patents owned by Karl Benz. Where in that time the country produced barely a thousand cars a year, now over five million are manufactured. Popular German brands include Mercedes-Benz, Volkswagen, BMW, and Porsche.

Japan – Gasoline-powered vehicles have been built in Japan early as 1907. Despite natural disasters that threatened the nation’s economy, Japan has worked to maintain its place among top car producers and exporters. Toyota, one of the top selling brands of all time, is based in Japan, as are Nissan, Honda, Mazda, and Subaru.

The United States – The US auto industry took a hit in recent years due to the economy. Through a combination of asset liquidation and government funding, the major brands (Ford, Chrysler, and General Motors) have worked to stay afloat. Despite this issues, the US remains a top producer with over seven million cars made on average in the country.

Republic of Korea – Over the last decade, South Korea has established itself as an automotive power thanks to an association between Daewoo Motors and GM, and Hyundai’s presence in the US with a major assembly plant.

Canada – While the country has no major native brand, Canada is important to the automotive industry by virtue of the many plants established by foreign brands, including Ford, Toyota, Chrysler and Honda.
Major Importers of Automobiles

While many countries produce domestic brands, automobile imports remain strong in economies that seek certain qualities, such as fuel efficiency and safety features. Among the top importers of automobiles:

The United States – Of the top brands sold in the US in the last year, many names bring to mind manufacturers from other lands: the Toyota Camry and Corolla, the Nissan Altima, and the Honda Civic and Accord.

Germany – While German brands dominated domestic sales in 2011, there is enough of a demand for foreign models to make Germany an important importer. Ford, Skoda (based in the Czech Republic), and Hyundai are popular names.

United Kingdom – Luxury is often synonymous with the British automotive industry. Aston Martin, Bentley, and Rolls Royce are three makes manufactured here, though Ford, Volkswagen, and the French Peugeot are seen more often on the roads.

Italy – Italy is known for the Fiat and Ferrari, but foreign makes like the Ford Fiesta, the French Citroen C3, and the Volkswagen Golf are also in demand.

France – The French appear greatly committed to domestic brands, particularly Renault and Peugeot, but foreign models from Ford, Volkswagen and the Romanian Dacia are gaining ground in the last year.
The Aftermarket

Equally important to the automotive industry is the manufacture and sale of auto parts and accessories, commonly known as the aftermarket. Sub-industries relevant to automobile sales may include products like tires and paint, stereo and GPS, engines and chemicals needed for operation, leather and vinyl for seating and safety features. According to the Automotive Aftermarket Industry Association (AAIA), the aftermarket in the US alone totals over $250 billion.

Though faltering economies and natural disasters have given the international automotive industry a number of challenges, one can conclude sales are destined to remain strong so long as the need for personal transportation remains. How and where people will by their cars may change over time as considerations for eco-friendly features grow in demand, but so long as people continue to buy automobiles the global industry will continue to gain speed.