What are the automotive industry trends car dealerships should look out for next year? Find out here.
Can the automotive trends next year impact the industry? 2021, without a shadow of doubt, has been a very hard year for all of us in the automotive industry. Car dealerships, whether new cars or used, are the ones who got affected the most. Semiconductor shortages that we are still experiencing, problems with the supply chain, and depleting inventories are just some of the setbacks this year. But will these change in the coming year?
The good thing is that we found out these industry trends have the potential to turn it all around. For 2022, we’re on the lookout for pushing electric and hybrid vehicles as well as dealerships embracing digital marketing more. For the past years, even before the pandemic started, most of the key players in the automotive industry are already harping on these ideas before they became a trend. And since now we are all here, it’s time to go turbo. That’s why we’re making this post to make all the dealerships aware of the things to come.
But, let’s not get ahead of ourselves here. Since we already have an inkling that these are going to be trends in the coming year (or years), what’s new then? We consider the pandemic as a curse, but for some, it is a blessing in disguise. Because, for them, this global crisis allows the industry to look at other things to prosper. And now that the pandemic is starting to clear up, we may see these trends in their fullest forms.
As dealerships, we need to know and learn where the consumers stand at this point. In addition, we need to look at what economic recovery is like for the automotive industry. With that said, here are five automotive industry trends to look out for next year.
Everything Goes Digital!
Although having a digital presence for dealerships is nothing new anymore, let’s re-discuss the importance of shifting your marketing efforts online. There’s no denying it; a digital dealership is the way to go.
So, what does it mean? It means that your business address is not your main business address anymore. As more and more people are relying on the Internet to purchase virtually anything, including cars, it is now high time for dealerships to amp up their digital presence as well.
While most car buyers spend some time online to research their next purchase, some are already starting to do their business 100% online. This strategy is applied by quite a few dealerships already, who are looking not just to provide information, but the whole digital experience.
But this doesn’t mean that you need to tear down our showrooms and leave all employees without work. After all, buying a car is too a personal purchase and should require human interaction. At least for now, you can’t test drive a vehicle on email or feel the leather and check the sound system through a Zoom meeting. It’s a tactile experience, and that should also be a priority.
What we’re meaning to say is to optimize your dealership by taking advantage of what the Internet has to offer. Give a better expectation for your online customers as to what they should know about the vehicles being sold. One way to do it is to provide a thorough vehicle condition report. Reports build confidence in buyers, and you can give reports anytime online. Information on the vehicle can now be in reach with just a few clicks on the phone or computer. Check out here for more info.
A Spike On Used Cars
If your dealership only focuses on new releases or you have low used car inventory, this is the time you should think this through.
Used car dealerships, despite having troubles in keeping the inventory up, are enjoying the boom in used car sales at the moment. Experts in the industry forecast that by 2025, used car sales will go as high as 9%. In particular, used cars that are four years old or younger are what the car buyers are on the lookout for. These cars have all the latest car technologies and yet they are not as expensive as, say, going after for a new one. In addition, the low annual percentage rate (APR) makes these used cars more luring than ever.
The pandemic also played a role in the surge of used car demand. Ever since the pandemic hit, many microchip companies closed their doors for the moment. This leaves car companies with no choice but slow down production or stop altogether. To end this domino effect, people go after used cars instead. Thus, we’re experiencing a used car sales increase right now.
However, there will be some considerations to take note of. For one, when there is an increase in demand, there is also an increase in prices. And two, because of the decreased production of new cars, the supply of used cars also decreased. For 2022, when we are on the lookout for used cars to sell, use a car valuation tool to determine the right price to buy and the right price to sell. Learn more about car valuation by clicking on the link.
Automakers x Tech Companies
Collaborations, these days, are being thrown out in all directions. But, no one is complaining, since it is one of the most effective marketing strategies in the 21st century. “Collab” is effective because both parties can benefit from it. Back in the 2000s, luxury fashion brands collaborated with streetwear companies and artists to reach out to average people. When the Youtube generation flourished, vloggers “collabed” with other content creators. This is for them to produce twice the content and get twice the reach.
And, for 2022, automotive industry experts believe that car companies will join forces with technology companies. It has been reported recently that tech giant Apple is in the talks with Korean car company Hyundai to build the former’s first vehicle. Although the partnership is not going to take off anymore (see story here), this story will not be the end-all, be-all.
Technology changes rapidly in this digital world. With that said, it won’t be a surprise if we see car companies collaborate with tech companies in the coming years. Since most car companies are slowly shifting towards producing electric, hybrid, or self-autonomous vehicles, it’s only wise to partner with one instead. It’s either increasing the budget in the tech department or partnering with key tech companies which is more cost-effective. We are still years or even decades away from a 100% EV world, but this automotive industry trend may start very soon.
And these are just three of the automotive industry trends to watch out for. Do you have any opinion on what you think is coming next? Please let us know. If you want to make your car dealership digital-ready, talk to us today.