Automotive industry trends

Automotive Industry is suffering changes, as other industries:

• Speed of online purchases from other sectors (electronics, trips, retail, food…) is carrying over to car purchases. It’s very difficult to sell cars on-line and this requires to have car dealers around the geography.
• More and more people research cars on-line as first step for buying, then they go to the store. This hybrid model is not enough to reduce costs.
• The ‘Sharing economy’ is coming to the automobile sector in to main ways: car sharing and ride sharing.

There are so much reasons for the changes happening, being the main factors contributing to the reduction of car ownership these ones:

• To own a car is expensive, so much expensive, specially in big cities.
• Better public transport has improved a lot in the metropolis and less connections by car are required. You can use public transport plus ride/car sharing, so you satisfy all your needs without owning a car.
• Socially, specially for young people, cars are less important than computers or mobiles.

So, a business model based on car sales growth is not possible anymore.

The solution? Diversify, how? I really don’t know, sorry I have not a crystal ball. What is clear is that:

• The reduction of the automotive industry will continue,
• The competition will be tougher and aspects as security, automation will be clear to enable the companies to compete.
• Software companies will play an important role in the industry, partnerships on this area will be key to see how the competition evolves.