The automotive industry is one that is facing more significant and fundamental changes today than at any point in its 140-year history. Technological, social, environmental, economic and political factors all exert an influence. However, the lasting impact of the pandemic could be the biggest game-changer of all.
Market research among drivers and those in the industry shows that many will be using their cars in different ways as we go into 2021. With working from home becoming the new normal for so many, fewer use their car for the daily commute. Furthermore, as Generation-Z comes of age, manufacturers must target their cars at the smartphone generation. Here, we take a look at some of the most significant trends that will be influencing driving habits over the coming year.
New driving habits
Most of us used our cars far less in 2020 due to lockdown rules across the country. There was already a growing trend towards flexible working, and the pandemic has only served to accelerate this. For thousands, working from home is now here to stay. Commuting will become the exception, meaning cars are mostly used for evening and weekend trips. This will be a challenge for carmakers whose main business is in high mileage commuter cars.
Changing fleet demands
Fewer commuters is also changing the shape of the fleet market. The collapse of Hertz in May 2020 was a warning to others of this declining sector of the market. With businesses everywhere forced to tighten purse strings, the car allowance is likely to be seen as a cost saving that will be relatively painless to employees who are now predominantly working from home.
A new generation of drivers
In the US, people tend to buy cars at a much younger age, and Gen Z is already a significant demographic to automotive companies. This is now being likewise felt in the UK. Car makers need to focus on connective technologies to appeal to this new market. If the established carmakers fail to react quickly, this could represent a huge opportunity for new Chinese brands to get a toehold in the western market, just like the Japanese firms did in the 1970s.
The debate over self-driving cars continues to roll on. There are five levels of car autonomy, and most carmakers are currently at Level 2, with tools like cruise control and safety technology that can step in to help with collision avoidance and lane control. Expect different carmakers to take different approaches here. Most established brands are looking to a gradual shift to Level 2.5, but Tesla is pushing on to achieve Level 5, full automation. Focusing on deployment over development is a risky strategy, but it could pay dividends. This is another area in which the Chinese manufacturers could rapidly establish an advantage in new markets.
Today, even a budget supermini can cruise comfortably at motorway speeds. Horsepower is simply not the priority it once was, and buyers are more interested in the overall experience their car delivers than its driving performance. The luxury vehicle market is likely to decline
over the coming months, but when it recovers, luxury brands will need to be ready to meet these new demands.