As we move into 2023, the automotive retail industry faces significant changes and challenges. Here are 10 of the biggest trends that will shape the industry over the next year.
These trends may impact how automotive retailers do business in the coming year, from used car sales to fleet management. So, keep an eye on these ten trends as you plan your strategy for 2023.
1. Retooling for the EV
If the EV isn’t successful at replacing ICE, it won’t be because the governments aren’t trying. However, although prices are higher than comparable ICE, they’re getting cheaper. Furthermore, incentives such as tax credits have made purchasing an EV increasingly affordable. As a result, dealerships are being asked to retool their service departments at a considerable cost.
2. The fall or rise of ICE
If governments had their way, the ICE would be gone. Countries worldwide continue to pressure automakers to increase their investments in EV technologies and transition away from ICE-powered models. In addition, with the introduction of cost-effective EVs, consumers may soon have easy access, assuming the economy stays good and buyers can actually charge their cars. Is the internal combustion engine headed toward its final days, or are the average consumers not buying the hype? If cost-conscious consumers don’t believe, we suggest you keep those ICE tools ready.
3. The Importance of Used Cars
Even if there are enough well-priced EVs available in the future, dealerships should keep the used car inventory high. If the last three years have told us anything, people still want to buy vehicles and are open to older models, especially if the new ones are out of their price range.
4. Connected cars as ongoing revenue
It’s not just Elon Musk; all OEMs are transforming the connected car into a rolling revenue stream. For example, systems like Porsche Connect are letting owners update to new safety and performance features on the fly. As a result, connected cars are poised to have an immense impact on our lives, redefining travel, and customer ownership as we know it today.
5. Online Vehicle Sales
The COVID experience forced some new features to be added to dealerships. For example, buyers can now have test drives delivered and enjoy home delivery after the purchase. In addition, some OEMs want to offer consumers the ability to skip the dealer altogether, leaving dealerships with the prospect of only doing aftermarket sales and service.
6. Self-driving cars are here
As technology evolves, self-driving cars are becoming an almost inevitable part of the automotive landscape. Recently, Tesla sent out their latest beta for owners, and companies like Apple and Google have set their sights on creating a fully automated vehicle experience.
7. Big data will change everything
For dealers, big data can analyze vast amounts of customer data (as well as usage patterns from fleets of vehicles) to create inventory tailored precisely to consumers’ needs. Big data isn’t just a tool for research or product development; it’s a powerful resource for companies looking to stay ahead of their competitors in an increasingly competitive market.
8. Fuel Cells
At the same time, EVs are being pushed, Fuel Cells are poised to be the real deal. They recharge faster, have five times the range of an EV, and do less environmental damage. Hyundai, Toyota, and other OEMs are backing fuel cell tech for long-haul trucking, which could interrupt all the EV plans and tech investments by dealerships.
9. Car subscriptions
As vehicles get more expensive, car subscriptions are becoming increasingly attractive. Companies like SIXT+, Kyle, GO, and Hertz My Car offers alternatives to those brought up in an upgradeable mobile phone society. And dealerships could enter this opportunity using fleet leasing software from companies like Dealerware.
10. Car companies and software manufacturers
With HD infotainment screens and more focus on user experience, simplifying vehicle software is turning OEMs into software companies. As a result, more vehicles are including Apple CarPlay and Android Auto on board, and, in June, Apple announced it would more deeply integrate its software into the core driving systems of cars.
Apple says, “heavy hitters like Honda, Nissan, and Renault are “excited” to support the new CarPlay, which requires access to vehicle core software systems. And, if Apple has its way, the interior screens of a consumer’s vehicle will look like their phone screens. CNBC reports, “The car software market will grow 9% per year through 2030, faster than the overall auto industry, according to a McKinsey report. McKinsey analysts predict car software could account for $50 billion in sales by 2030.”
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