These past two years have seen an extensive list of major challenges within the automatic sector, from supply chain management issues to the sudden plunge in delivery demand. Beyond the myriad technological advancements, the novel pandemic has dramatically transformed the automotive landscape. This leaves us with the big question: with all the considerable changes, what will the automotive industry look like in the near future?
To get a clearer picture of a new automotive industry, here are a few trends that are likely to charge full speed ahead in the upcoming year of 2022.
Rise in Subscription-Based Vehicle Usership Models
As with any industry, the automotive sector mirrors the ever-changing customer behaviour. Unlike the older generation, car ownership is not one of the younger generation’s priorities. There are various reasons behind this shift. Today’s consumers would prefer not to worry about maintenance and the extra costs that come with it. Moreover, the notion of purchasing an expensive, depreciating asset is a big commitment, especially in Singapore. With fast-trend cycles and electric vehicles (EVs) gaining considerable traction, consumers prefer less commitment and more flexibility.
Car subscription is a model that aims to meet the automotive needs of today’s consumers. Similar to a car lease, subscriptions allow customers to drive a high-quality car for a small down payment, except they have shorter, more flexible terms. They offer a shorter commitment and lower price point - attributes that today’s consumers are looking for.
Digital Automobile Sales are Booming
Unlike many industries, the automotive industry is one of the sectors that was slow in the adoption of e-commerce - that is, until the pandemic came rolling around. Prior to COVID-19, dealerships were severely under threat as companies like Tesla were skipping the middleman to directly sell their cars to their consumers through company-owned stores. However, due to the pandemic and the lockdowns, as well as safety restrictions, consumers made the switch to digital with their purchases, including their vehicles!
With the implementation of automotive e-commerce, buyer satisfaction spiked exponentially in 2020, and it is easy to see why. By bypassing an in-person car dealer, one is able to bypass car salespeople and avoid any potential hard selling and negotiation pressure. Moreover, customers can input their vehicle of choice and make their due diligence regarding the vehicle’s specifications without any surreptitious inputs by a salesperson. With a more efficient buying process, buying satisfaction naturally increases. By 2030, the global online car buying market is expected to reach a whopping $723 billion.
This is one of the few perks that comes with the digitalisation of the automotive industry. Read our article on the rapid digital revolution in automotive here to learn more.
More Green Vehicles on the Road
The collective environmental awareness has pushed for commitment for sustainability not only among the general public, but also the business community. The automotive industry has been learning to adapt by creating cars that produce fewer emissions than conventional models. Within the past few years, the EV market has flourished, and it will continue to be an upward trend in the near future. We can expect to see more car manufacturers committing to pushing out more EVs of various models and designs to meet the needs of a larger group of people.
However, mass adoption of EV is not possible without a widespread charging infrastructure. A Deloitte study has shown that many drivers are hesitant to buy an EV due to their price point as well as driving range. The driving ranges for EVs are now well over 400km, but the building of infrastructure in terms of charging stations is still up in the air. Wireless charging stations are deemed the go-to solution, but the situation is at a standstill. Firms do not want to erect the infrastructure when there are not enough EVs on the road, and manufacturers do not wish to create more expensive wireless charging stations without that infrastructure. Until there is a way to navigate around this roundabout situation, the growth of the EV market will be significantly limited.
Welcoming Automotive Trends in 2022
The upcoming year is one that is full of boundless opportunities for the automotive industry. These trends will mirror the ever-changing consumer behaviour, introducing changes and solutions to further enhance the driving experience.
Welcome these new trends with Singapore’s preferred car dealership, Zion Auto Gallery. Since our establishment in 2011, we have dedicated ourselves to providing an extensive range of high-quality import and export vehicles, both new and pre-owned. Our customer-centric approach translates into service excellence, ensuring that your visit is a satisfactory one. If you wish to browse our selection of vehicles or have any inquiries, be sure to book an appointment with us for a quick chat at no additional cost.