Digital disruption will be one of the major forces driving the automotive industry in the future and it set to change cars as we know them.
This is the word from Innovation Group, which today launched its “Automotive Future Now” report, which investigates and unpacks the global and local trends impacting the industry.
Glen Mollink, CEO of Innovation Group SA, comments: “The rise of the connected car and digitally-savvy customer is of particular interest.
“The connected customer will change the landscape of the automotive industry moving forward as they are demanding more interactive services and mobile apps that plug seamlessly into connected vehicles.”
Mollink points out that consumers are demanding more interactive services and mobile apps that plug seamlessly into connected vehicles, and there is little doubt that the automotive industry is under pressure to adapt alongside these digital advancements.
A more tech-savvy customer means there is less reliance on dealerships to source suitable vehicles, with consumers now doing their own research into suitability and availability online. Consumers are also more demanding because they don’t have to rely on what a particular dealership has available, but can source the most suitable vehicle online, quickly and easily.
The rise of the connected customers will have massive implications for the automotive industry, Mollink says, and we can expect to see greater collaboration between OEMs and dealerships in an attempt to attract and retain these customers.
Meanwhile, in-car services aimed at providing infotainment, location-based services and apps for driver assistance, are set to gain popularity in newer vehicle models in 2016 and beyond.
The key to success of this, however, relies on the relevance to the driver or service experience in the mind of the vehicle owner, Mollink says.
“Apps that warn about possible collisions will be at the forefront of this technology, giving drivers the ability to drive smarter and safer,” he explains.
The Automotive Future Now report finds that the South African market in general is in for a tough rise in 2016 as a result of slow GDP growth and the steady decline in the rand’s value.
Despite the economic pressures, though, there are positive influences that will carry the industry through tough times, says Mollink. “An increase in urbanisation and the growing middle class contributes to a stronger car ownership culture in South Africa.”
However, the report also indicates that the upcoming generation of customers is likely to be more interested in mobility solutions like Uber and car sharing. This could be driven partly by affordability concerns among mid-level and aspirational buyers.
The Internet of Things (IoT) will also have an effect on the local automotive industry, says Ricardo Coetzee, managing executive: automotive at Innovation Group SA, signalling a major shift in what customers want from their car and the associated driving experience.
Coetzee points out that technological advances within the automotive industry as well as the consumer space is forever changing the relationship between the two.
The report outlines how the customer lifecycle has changed over the years and how the industry needs to address this moving forward.
“If you were to speak to car manufacturers years ago, they would almost always tell you that the most important aspect of their work was the product,” says Coetzee. This is no longer the case, however, and it is now more important for manufacturers to consider their customers’ needs and wants at every point in to the process – from design of the car to the communication mechanisms after a sale has been made.
This means that newer and more effective ways of communicating with connected customers, and it becomes critically important for businesses to engage with their customers in a more meaningful way.
“Customers are looking to communicate with businesses in different ways,” says Coetzee. “While connectivity within the industry is over primary interest, it is also important to customers that communication is a key focus.”