How the Automotive Industry is Evolving
How is the automotive industry evolving? The next level down from global trends is the evolution of consumer demand. This shows the changing attitudes towards cars and the emergence of new markets and regions that offer interesting opportunities for car manufacturers. The traditional car ownership experience is gradually shifting with a shift towards leasing. Social media and sharing economy have made the consumer a center of attention for manufacturers. Hence, the automotive industry is facing a sea change.
In addition to digital transformation, the automotive industry is also undergoing major change. These changes create new players with differentiated capabilities and change the fundamental dynamics of value creation. These new players are disrupting the old order and creating new ones. They should consider how they will fit in the future mobility ecosystem. The key questions are: how will they adapt to the changing environment? How will they compete with new entrants? What will their strategies be?
The traditional dealer channel has many flaws, such as high costs and poor service. These challenges have spurred many manufacturers to seek new methods to improve the channel-value equation. Moreover, consumers’ brand loyalty is increasingly derived from the overall experience of buying a car. Hence, car dealers must develop innovative strategies to meet the needs of a customer. The automotive industry is also experiencing unprecedented change. Those who are looking to stay on top of the game must rethink their strategies.
New competition from emerging countries is putting traditional OEMs on the defensive. Chinese manufacturers like Great Wall Motors and Changan have been increasing their production capacities in new regions in hopes of boosting their global sales. These changes are not limited to the automotive industry. Other industries such as the manufacturing of mobile devices and computers have also increased interest in less traditional regions. In addition to these, the growth of the middle class has made new markets more appealing for manufacturers.
To survive the future, automakers must develop a strategy to create a more targeted mix of channels. They must also develop means to capture more downstream value. By integrating these two strategies, automotive manufacturers can create flexible strategic paths and drive real innovation in their business. The evolution of the channel has been driven by retailers and distributors in other industries. These changes are not going to be easy for OEMs. And they should not be too late to react to the shifts.
The automotive workforce is rapidly changing. The number of trade workers has decreased, while the education level of workers is increasing. This change is forcing automakers to adopt advanced automation solutions. Automation is transforming the traditional way of manufacturing. With the advent of digital technology, the automotive industry is embracing new technologies. The automation of processes and parts has largely replaced backbreaking labor. The new workforce is also changing the way manufacturing takes place.