It’s not a secret that current economic conditions have had a significant impact on the automotive industry across the globe. Auto show cancelations and manufacturing closures will require specific attention moving forward. Faster production cycles and shorter project timelines will need to be implemented quickly for car companies to recover. They will also have to reprioritize programs that are better fit for their consumers. Here are two things all car companies will have to do to be successful in this new era.
Car companies will have to rethink the car buying process
There has been a mental shift in the way consumers view car ownership over the last several months. Consumers are seeking personal transportation because it’s comforting. Owning a personal vehicle feels safer than ridesharing.
We are seeing a rise in customer demand to own their own cars. Buyers want to have their own cars during and post-COVID19. This is a stark contrast to those thinking of ditching cars to rely on almost daily public transportation or ridesharing just a few weeks ago. People are now finding themselves most comfortable in their own homes and their vehicles.
An Ipsos survey in early March shows that people’s mindset in China changed as a result of the pandemic, with respect to car ownership, public transportation, and alternatives to such as taxis and ridesharing. The use of personal or private cars almost doubled after the outbreak. The dependency on public transportation slipped by nearly half. Taxis and ridesharing services have seen such significant decreases in demand that they have looked to providing other services to survive.
With commuters in the U.S. relying less on public transportation and ridesharing services, 93 % of people said they use personal vehicles more often. But among those surveyed in China who do not own a car, the majority responded that they plan to buy a vehicle for health and safety reasons. This shift is also taking place in the U.S. A recent survey from Cars.com revealed that 20% of respondents who did not own their car were considering buying one. The dealerships will have to consider continuing to make customized vehicle deliveries and whether the car buying process can remain digital.
Auto launches will have to pivot become digital media events
Given the circumstances of postponement or cancelation of auto shows and major conferences, some auto manufacturers postponed launching vehicles. Others decided to rethink the launch format for new cars and are taking them entirely online. This is a revolutionary change for an industry known for its exclusive invite launch events designed to garner attention.
Hyundai, for example, unveiled its 2021 Elantra through a live stream in early March. Using video content to showcase the development of vehicle features, Hyundai captured the interest of viewers who were safely watching from their homes. The first teaser video formant included live streams, and the walk-around clip had almost 800,000 views in total.
Other car companies have already made plans to follow suit. Later this week, Acura will reveal the 2021 TLX Type S via a live digital event. Others like Ford had already been moving the needle toward digital media launches with their Mach-E release.
As we expected, the pandemic has changed the business needs of both car companies and car buyers. And while we can not predict the outcome, these business changes will likely be seen in buyers’ behavior. When automakers resume production and customers are finally moving down the highway, success will mean considering the consumer’s lifestyle and matching them with new approaches for browsing and buying. This could mark the beginning of a new era in the automotive industry.