Changes in the automotive industry brought about by the COVID-19 pandemic include shopping for cars online instead of in dealerships.
The COVID-19 pandemic will likely delay the arrival of autonomous vehicles due to layoffs and derailed research, but the future remains bright for the autonomous vehicle industry, according to Marx Layne and Co., a Farmington Hills-based public relations and marketing firm.
“Input from innovators and tech sector leaders will be vital for the success of AVs after the COVID-19 threat has passed,” says Mike Szudarek, who leads the firm’s automotive practice. “Auto companies are no longer just auto companies, as we’ve moved far beyond mechanical pieces in today’s digital landscape. Those who will succeed must now view themselves as tech companies and see their competitors as more than just other automakers, but as the tech titans of Silicon Valley who have a high stake in the market.”
He says business as usual is no longer an option for OEMs. He identified five trends expected to impact the market outlook and propel the industry forward in the months ahead:
Supply chain diversification: With the onset of COVID-19 and the resulting hit to the supply chain, automotive brands are working to diversify their global supply chains and keep them closer to home to move away from just-in-time production.
A reduction in research and development: Nearly all automakers and suppliers are expected to cut back on R&D spending due to the pandemic, declining sales, and production halts. Investments are expected to be delayed by just over four months on average, with connected manufacturing and autonomous vehicle technologies being delayed the most as emphasis shifts to focus on alternative propulsion technologies.
An increase in car ownership and decrease in ridesharing: As social distancing and health concerns prevail, attitudes toward cleanliness of public transportation and ridesharing have shifted.
Contactless dealership experience: Dealers have started offering alternatives to spending time at dealerships to purchase a new vehicle, turning to digital purchases and contactless delivery.
Increased attendance at digital events: Largescale auto shows and conferences have bene postponed, cancelled, or made digital. OEMs and suppliers are also offering virtual product launches.
Finally, Szudarek says cars are becoming more expensive. “We already know that today’s vehicles are smarter, safer, and loaded with technology, making them better products,” he says. “As long as consumer demand is there, automakers will continue to seek out ways to maximize their margins, and that, unfortunately, trickles down to your pocketbook.”