The Global Automotive Industry Outlook: The Future of the Worldwide Auto Industry
The automotive industry is facing big changes both in buyer demand and technological advancements. Coming off a year that slumped in growth, 2019 may not have the needed answers. Instead, it may produce even more trouble for the industry outlook.
There are several variables that could impact the auto industry. There is none greater than President Trump toying with the idea of imposing tariffs on Mexico.
This could have damaging effects when we consider the co-dependency that the U.S. and Mexico have on each other. Both countries rely on each other for about 40% of their auto parts imports and exports.
The damage this can cause is sure to spill over and affect foreign automakers.
Tariffs are heavily on the minds of everyone looking at the future of the automotive industry. However, there are a few other trends we should also focus on.
Keep reading for more on the global automotive industry outlook.
Industry Outlook is Great for IoT
The Internet of Things (IoT) continues to transform with innovative automotive trends. Having internet accessibility in a motor vehicle unchains people from their homes and offices. The growth in technology can literally turn a vehicle into a mobile office.
Weekend getaways and long recreational trips have also become a little more exciting.
When it comes to connected vehicles we are a long way from the inception of OnStar, which was an industry pioneer. Today, the automotive industry is partnering with telecommunications companies to increase connectivity. User experiences are on the rise and the IT experts are tuned in to what drivers want for a better experience.
In the digital era, everyone wants to be able to access video streaming no matter where they are. With new advances in IoT, processes are in place to load and store video in anticipation of dead zones.
Artificial Intelligence (AI) is another growing enhancement. There is no need for drivers to be distracted looking for addresses and locating directions. With AI drivers can access Google Maps, phone a friend, or get answers to questions without pulling over.
Drivers will also be able to interact with manufacturers to assess performance issues, schedule appointments, and order parts. We can also look forward to more cloud-based servers as a growing trend.
Industry Outlook for Electric Cars
We may not see it yet but industry buzz predicts that electric cars still have promise for the future of the automotive industry. The International Energy Agency (IEA) believes consumers will soon see the value in these vehicles.
As people become more cognizant about global climate change they will better understand the benefits of electric cars. One complaint consumers had was the cost of car batteries and accessibility of charging stations. These items are being addressed.
The cost of batteries continues to decrease. Making the vehicles more affordable to operate will need to be a collaborative effort between automakers and the governing bodies of countries throughout the world.
The popularity of electric cars will guide the market in terms of increasing accessibility to docking stations. We are already seeing an increase in stations along city streets and in commercial parking garages.
Increased battery life will extend charge times, which will be another plus for this segment of the automotive industry.
Low Demand for Sedans
The automotive outlook for sedans will continue to see a decline as people choose SUVs as their means of transportation. It’s not only in the U. S. but drivers in China, Australia, and other countries are choosing SUVs over sedans.
There was a time when SUVs may have been too pricey and too expensive to maintain. Environmentalists shouted from the rooftops they were not eco-friendly and were destroying the environment.
Today, automakers are producing smaller SUVs that have been remarketed as “crossovers.” These smaller versions give car buyers the same feel of a sedan but with a little more class and comfort.
Ride Share Companies Impacting Sales
Whether it’s Lyft, Uber, or another start-up, rideshare companies are having an impact on the global automotive industry. As fewer people are opting to use these services fewer people are buying new cars.
These rideshare companies are not just transporting people they have also infiltrated the food delivery service industry. This means fewer people are heading out to dinner at restaurants or to grab a quick meal at a fast food joint.
Delivery services are not limited to food. More people are driving less with faster delivery services of goods purchased online. We can see the effects of this as malls shutter their doors and brands go out of business.
The impact on the auto parts industry may still be down the road but it is a trend worth looking at.
Affordability of New Vehicles
On the heels of the recession of 2008, many people have not fully recovered. Lower paying jobs, poor credit, and an increase in car prices are all reasons why dealerships may be struggling to move inventory.
Automotive industry trends, show more people are buying used cars than brand new ones. Another segment is holding on to their existing cars much longer. Although this may signal bad news for automakers, it is good for parts makers and dealers.
Trends in the auto industry have also seen a shift in the length of auto loans for new vehicles. Terms on loans have been stretched to 72-months. Economist has warned that it may do more damage than good to go beyond this point.
The Future of the Auto Industry is Changing
This global industry outlook touches on some of the trends, both positive and negative, that automakers are facing. To remain viable and keep up with the changes they will need to be responsive to the needs of the consumer.
Here at Mayco International, we remain committed to being the tier 1 automotive supplier of choice. Whether you’re working with a new or used vehicle, we want to be first on your list for your automotive supplies.
Contact us today to speak with a member of our development team to see if we have the parts and supplies you’re looking for.