As the automobile industry progresses from when it was introduced to the mainstream global markets, automakers have started facing challenges when it comes to how the digital business models for the electric vehicles and autonomous vehicles have been designed. Many consumers anticipated that the automotive industry would adapt to the shift of becoming fully digital by introducing the concept of online retailing. However, legacy automakers still sell most of their vehicles to franchise dealerships that further sell them to the end consumer through physical retail stores.
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Digital Technology Paving The Way Forward
While looking to boost their automobile sales and reach consumers using the right channels, auto manufacturers have shifted their business operations from the traditional brick and mortar presence towards using digital technology. “I do not think there is a defined date but now is the time to connect all the dots for technology solutions from consumer engagement with chatbots to dealership marketing and operations. The future is now for the industry and there is no way to avoid it,” said Joe Chura, Co-Founder and Chief Executive Officer of Dealer Inspire. By adapting and integrating digital channels of retailing, the automobile sales market has definitely shown significant progress, and it also created a sense of ease for the consumers. Nowadays, automobile buyers, sellers, and owners can upload their inventory on various apps that have proven to increase consumer acquisition rates. Moreover, automobile sales have also increased with the help of advanced CRM systems, wherein retailers are able to keep a track of their customer information. This data can further be used for understanding the taste and buying patterns of the consumers in the long run. Making use of augmented and virtual reality technology, automakers are able to amplify the consumer’s digital in-store experience. Furthermore, these technologies provide the consumer with the access to fully personalize the vehicle of their choice even before making the actual purchase, leading to an increase in automobile sales. According to the Big Data Market in the Automotive Industry - Growth, Trends, Forecasts (2020 - 2025), automakers have been able to improve their competence levels in terms of measuring their automobile sales figures. This improvement is a result of incorporating big data analytics into their digital business models. In order to further promote digitalization in the automobile market, General Motors has recently announced that it would further enhance the use and reach of telematics by selling 4G data packets for electric vehicles. These are powered by the AT&T network which helps connect the car with other devices.
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Digital Turmoil In The Automotive Industry
The COVID-19 pandemic has certainly affected the global economy, but the recent report - ‘Augmenting the daily commute’, published by Ericsson shows that automakers are implementing new ideas in order to boost their overall sales figures. By implementing the latest 5G-assisted advanced driver assistance system into their automobiles, automakers have increased the safety levels for their consumers. These systems are designed to alert the driver when they are not paying attention to the road and activating automatic brakes if needed, thereby saving lives. “Personal cars are still the main mobility solution in places that haven’t reached peak car. When the road infrastructure is saturated, other solutions take more relevance as it happens in most large cities,” said Arwed Schmidt, Technical Sales Lead at Easymile. While owning a car was part of a status quo in recent years the emergence of digital features being integrated in the automobiles, providing the best user experience tops the list nowadays. Moreover, 76% of millennial parents living in the city state that it is quite important to own a car, in spite of the technological changes that have taken place.
Conclusion
While the majority of the automakers have started incorporating digital processes in their day to day operations, there are some automakers who are falling behind in this technological competition. As automakers improve their existing business models using digital technologies, or provide various customer touch points, we are starting to notice that the technological investments that have been made are more inclined towards acquiring and retaining customers, rather than focusing on automobile sales. In addition, automakers are trying to boost their sales by ensuring all their partners and vendors are adopting digital means, ensuring that serving the consumer at all times is their focal point in being successful.