The automotive sector is one of the world’s largest and most significant industries. But the sector as a whole has been steady over the past decade. Incumbents have been pushed to change as a result of rapid technical and environmental advancements. And this has resulted in a spate of hitherto unheard-of companies.
In this blog, we’ll discuss the in-depth discussion of 10 key developments shaping the car industry. .
1. A Global Increase In Electric Vehicle Use
The worldwide transition to electric cars is arguably the most significant development in the automobile industry (EVs). According to the IEA, EV sales will have topped 3 million worldwide in 2020. More than 4% of all cars are sold in the world!
Sales of electric vehicles (EVs) in 2020 exceeded projections, increasing by more than 40% over the previous year. As a result of this increase, it is thought that there are currently more than 10 million electric vehicles on the road.
China and Europe have been the fastest-growing markets for electric vehicles during the past five years. Despite this surge, EVs are still only predicted to account for 8% of all automobiles on the road by the year 2030.
Over 30 percent of all cars will likely be electric vehicles by the end of that decade. It is likely that mandates from the government will be the primary impetus for this expansion.
Adoption may be sped up by improving battery efficiency and establishing a widespread network of EV charging stations. On the other hand, it’s anticipated that over 60% of all Americans have cars that will allow for electric car charging.
2. Arrival Of Autonomous Vehicles Revolutionizes The Transportation Sector
There are just about 1,400 fully autonomous vehicles now in use in the United States; thus, the AV sector is still in its infancy. However, it is predicted that by the year 2040, there will be 33 million autonomous vehicles on the road.
The “Levels of Driving Automation” standard created by the Society of Automotive Engineers (SAE) illustrates the development of automated features in vehicles. From SAE Level 0 to SAE Level 5, the standard has a wide variety of gradations. The number of Level 1 compliant automobiles now on the road exceeds 30 million.
Furthermore, by 2024, it is anticipated that more than half of all cars will fall within the Level 1-5 range. There is presently a $54 billion valuation on the worldwide market for driverless vehicles.
And its growth is anticipated to multiply by ten during the next four to six years. The autonomous car market has attracted major players such as Tesla, Alphabet, Ford, General Motors, and Volvo.
If Level 3 or 4 autonomy were to acquire popularity in the transportation sector, it is predicted that 4900 truck-related deaths would be prevented annually, saving the business $800 billion. This might allow drivers to keep their professions while preventing fatigue-related accidents. Estimates suggest that by 2021, there will be more than 2,000 self-driving trucks on the road, up from about 150 in 2020.
3. The Level Of Connectivity In Vehicles Keeps Rising
More and more cars are becoming “smart” as 5G and the IoT expand. Connectivity to other software systems and environmental sensing capabilities define this class of automobiles. In 2020, it was predicted that around 47.5 million fully-connected automobiles would have been purchased worldwide. In 2021, it was anticipated that figure would increase by 20%. In 2022, the connected vehicle industry is expected to generate $75.74 billion worldwide.
By 2028, analysts predict a whopping $191.83 billion in revenue. The widespread use of 5G networks is largely responsible for this expansion. Statista estimates that the number of people who have subscribed to a 5G smartphone will treble worldwide by the end of 2021.
A more robust 5G network that can handle vehicle connections is expected to result from such widespread deployment. It’s no secret that the biggest names in technology are targeting this sector. Team Upshift is new connected automobile cooperation between Google and Ford.
4. More People Buying Cars Online
Every step of the car-buying process is being impacted by the proliferation of online resources. More than nine in ten people who buy cars do their homework online before making a purchase.
In addition, the proportion of wholly online transactions is growing. About 4.2% of all automobiles were sold online before the outbreak. The widespread adoption of digital platforms by retailers is anticipated to have boosted this figure by 2020.
Considering that 83 percent of auto buyers have expressed an interest in doing their shopping online to save time, this makes perfect sense. In 2019, 80% of automobile purchasers had previously utilized a third-party website. The convenience of these online auto retail services is unparalleled.
5. The Market For Automotive Components Keeps Expanding
For twenty years, the market for automobile components throughout the world has been expanding at a steady clip. As a result of the rise of online shopping, the car parts industry has undergone a dramatic transformation. Nowadays, 94% of buyers research a product’s specifications on the maker’s website before making a purchase.
In addition, by 2022, the online auto parts retail market is expected to be worth $19 billion. The average age of cars on the road is rising, which is good news for the auto parts sector. Nonetheless, the rising quality of freshly made automotive parts is also reducing the market for parts. Trucks and light SUVs are major contributors to this expansion. Sales of add-ons and replacement parts tend to be greater for these automobiles.
6. Auto Sales Has Been Impacted By High Prices
Both sales and pricing of automobiles in the United States are on the decline. Many predicted that the automotive sector would bounce back in 2021 after the pandemic, but that did not occur. First-quarter 2022 sales were the lowest for any first quarter in the previous decade.
The first half of 2022 had a 25% decline in sales of passenger automobiles compared to the first half of 2021. According to research from Cox Automotive Industry Insights, the global market for brand-new automobiles will only produce 14.4 million units in 2022, which is somewhat lower than the sales volume of 2020.
7. Sales Have Dropped Because Of A Lack Of Stock
The scarcity of chips is delaying the delivery of new vehicles to dealers’ lots. Yet other supply chain problems and plant closures have also contributed to the shortage. Reports from the first half of 2022 indicated that car inventories were stable, hovering between 1 million and 1.1 million automobiles.
Micro mobility may cause a shift in consumer behavior, as stated in sentence number seven. Cars have been the most popular choice for transportation in the United States for several decades. According to a survey conducted in 2022, the majority of Americans (76%) drive to work each day.
In 2019, however, more than 80% of commuters will use their personal vehicles. Some experts predict that people’s growing distaste will fuel the rise of “micro-mobility” for driving due to concerns about the environment and traffic congestion.
Micro mobility is the movement around small, slow-moving machines. Bicycles, scooters, mopeds, and their electric variants are all good examples. For instance, in 2021, the market share of electric bicycles grew by 240%.
Electrically powered scooters are also seeing increased demand. It is projected that the US market will expand from its 2021 value of $14 billion to more than $31 billion by 2028, a compound annual growth rate of 10.7 percent.
McKinsey predicted that by 2021, sixty percent of commuters in the United States would be open to using micro-mobility. Micro mobility vehicle users report switching to public transportation 32 percent of the time or more.
There is a growing trend toward using micro-mobility vehicles that are shared among passengers as a means of transportation in cities where air pollution and traffic congestion are severe. The number of rides taken on shared bicycles and scooters increased to 136 million in 2019. That’s a sixty percent rise over last year.
8. Sales Of Luxury Cars Keep Rising
The previous two years have been difficult for the automotive industry as a whole, but high-end luxury businesses have seen surprising success.
Luxury vehicle sales are projected to increase by up to 14% annually between now and 2031, while the market for vehicles costing less than $80,000 is forecast to stay stable.
The popularity of several different brands has skyrocketed recently.
Rolls-record Royce’s year for sales was 2021. With an increase of 49% year-over-year, the company was able to sell 5,586 automobiles. This trend was mirrored by Bentley, which also saw a banner year of sales in 2021. Over 14,000 cars were sold, a 31% rise from their previous high of 11,000.
The same may be said about high-end sports vehicles. And in 2021, Lamborghini had its best year ever financially. Over 8,000 vehicles were sold, resulting in the company’s net earnings of $408.2 million.
Many people have been surprised by how quickly environmental protection and technological progress are developing. The production, distribution, maintenance, and operation of automobiles are all undergoing transformations as a result of developments such as electrification and Internet of Things connectivity. The advancements in technology will cause these tendencies to permeate every area of the car industry.