Whether you are thinking about entering the automotive industry, or you just want to learn how it is doing today, here are some of the things you should know. This article will explore the changes in the auto industry over the next few years, as well as how it will be affected by changes in technology and economics.
Inventory shortages have created so many holes in the market
Inventories have been a challenge for the auto industry since the start of the year. But the industry has gotten off to a better start than expected. In late July, 1.09 million new vehicles were in inventory. This number was down from a month earlier, but still the lowest since the financial crisis of 2008.
Inventory shortages are a problem for automakers, too. Some plants have been shut down, and others have slashed production levels. This has led to a shortage of some parts, and a delay in some vehicle launches. The auto industry may need to stockpile key components to avoid a supply chain crisis in the future.
The supply chain has been plagued by disruptions for the past year and a half. The ol’ chip shortage has hit the auto industry hard, and it may be a long time before it returns to normal. However, the industry is expected to make some progress in 2022.
Autonomous vehicles are set to disrupt the auto industry
Optimists are betting that the rise of autonomous vehicles will lead to lower gas prices, faster commute times, and more convenient transportation. Pragmatists, on the other hand, are betting that autonomous vehicles will lead to more congestion, more emissions, and more deaths on the road.
Self-driving cars could lead to fewer drinking and driving accidents, fewer human error accidents, and safer driving conditions. But the technology is still in its infancy.
Waymo, Google’s self-driving car company, is starting real road tests. Waymo has a fleet of vehicles that runs routes from Houston to El Paso. The company’s cameras monitor the truck’s route, and it takes over the autonomous software.
The company’s Car IQ product is a software package that will automatically pay for gas, tolls, and parking. It will also be able to pay for repairs.
China is the world’s largest auto market
Despite a decline in retail sales in the first three weeks of October from last year, China’s auto market is expected to see a rebound in the second half of the year. The Chinese government has been using incentives and subsidies to drive sales, including the introduction of new tax rates and subsidies for the purchase of new energy vehicles.
The China Association of Automobile Manufacturers (CAAM) has released its auto sales report. Overall sales rose to 2.37 million units in June. In the first nine months of the year, the market grew 4.4%. China remains the world’s largest auto market. However, it is expected to grow only 3.1% in 2022, from a previous estimate of 5.4%.
The new energy vehicle market has been growing strongly in China, with the country’s leading brand BYD taking advantage of rising demand. Several mainland Chinese startups and domestic automakers are also expected to contribute to the growth.
Ecommerce has completely changed the automotive parts market
Traditionally, automotive OEMs relied on freight shipments, but the online automotive parts market is transforming their business model. OEMs are increasing investments in e-commerce capabilities. In some instances, they are even sponsoring solutions that allow dealers to sell their OEM parts online.
Online sales channels have transformed consumer behavior. Nine out of ten shoppers research products online before they buy. This is attributed to improved consumer access to information. Online advertising, video content and reviews are also contributing to the industry’s digital influence.
The business-to-consumer (B2C) segment captured over 65 percent of the revenue share in 2020. This is attributed to higher sales volume, better prices and convenience. The B2C segment’s share is expected to grow to more than 75 percent by 2022.
Connected services technologies will gain prominence
Increasing demand for an “always connected” paradigm is triggering automakers to find innovative software and electronics design. This will result in the automotive industry competing with outside competitors and new expertise.
Enabling technologies facilitate the exchange of real-time data with high reliability. They facilitate vehicle-to-vehicle and vehicle-to-infrastructure communication. These technologies are used for safety applications, road-condition warning, SOS services, and remote diagnostics.
Enabling technologies also facilitate integration between smartphone devices and in-vehicle communication networks. They can help vehicle manufacturers develop breakthrough applications that address safety issues. This will reduce the number of road fatalities.
Embedded data sensors can help carmakers monitor performance of car components with more accuracy. This can also enable lean manufacturing techniques. They are also important for real-time traffic management.