Are technological developments set to disrupt the automotive industry?
The automotive industry is at an interesting point. Consumers are in the literal and figurative driving seat; their habits are shaping the car production process from initial concept through to retail purchase. As EY put it, we’re heading towards a customer-centric world.
It affects the technology put into our vehicles. A more environmentally-conscious world will want eco-friendly, electric vehicles. A 24/7, ever-connected lifestyle demands cars that are digitally capable. And upcoming generations, who have it all in the palm of their hands, will want a simplified, mobile buying experience. How will these trends evolve in the future and what potential technology could we see rise to the top in the automotive industry in the years to come?
Better tech
While consumers want cars that are good for the environment, they will always put their own convenience first. The power of the engine isn’t as important to people as the car’s safety, phone connectivity, space, or comfort. What they would love, according to Deloitte, is a car that keeps them up to date on traffic or the state of their car.
This could manifest in future cars as an AR dashboard. All relevant information would be displayed on the windscreen, Minority Report style. It’s been a concept in the works since at least 2012 when Mercedes-Benz showed the tech off at CES.
Cars connecting to mobile devices isn’t new, but there’s definitely room for further integration. Using AI and machine learning, predictive vehicle technology can automate the setting up process and automatically adjust application preferences based on the driver. It can also be used to predict collisions and when the vehicle needs maintaining.
All of this sounds great, except consumers aren’t necessarily willing to pay for it. Whether it’s an issue with the price or the ethical implications of giving an automotive manufacturer your information (especially in the case of biometric enhancements), people are reluctant to cough up the cash. But are they the only people buying cars?
The Uber effect
Could we see a trend where car purchases come less from everyday consumers and more from ride-sharing businesses? In 2015, Marc Winterhoff predicted that the rise of autonomous drive vehicles would see mass market brands fall behind. In his vision, the market would be split in two: those cars and vehicles that offer a premium experience.
Given that worldwide car sales are expected to hit almost 80 million this year, we can’t quite see Marc’s idea coming true anytime soon. But you can’t deny the rise of ride-sharing apps like Uber or Lyft which might affect overall car sales. The “Uber effect” is more likely to hit more metropolitan areas where owning a car is seen as a hassle. It isn’t necessarily about the environment – when ride-sharing was banned in Austin, Texas, 45% of people went back to using their own cars, compared to just 3% who moved to public transit. And with driverless technology, we could see autonomous taxis. Finally, no more pesky human interaction!
If we did see a shift towards further ride-sharing, the people buying cars would be doing so from a business standpoint. It would be less about fancy bells and whistles, and more about efficiency and reliability. It could potentially lead to a shorter car lifecycle; app users would want their driver to use a more modern vehicle because of the implied safety upgrades, so drivers would need to change every couple of years.
The Millennial Wave
Anyone who predicts the death of traditional car-buying habits is more than likely a sensationalist. The market’s shift is glacial, but – to the sensationalists’ credit – one worth paying attention to. While car sales aren’t likely to tank anytime soon, the generational shift will play its part. What Millennials look for in a car will differ to Baby Boomers, which will need to be kept in mind when designing the vehicles of the future.
This will affect auto retailers too. We mentioned it at the start – many are already changing to a customer-centric approach. The car-buying process begins online, so your technology needs to be up to date not just in the car, but on your site too.
From VR to AR, at RealtimeUK we push the boundaries of what technology can do for the automotive industry. Bring your vehicles to life with the best car configurators on offer. Reach out to me at [email protected] to talk about your next project.