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.

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