As the automotive industry emerges from the pandemic, a number of major trends are appearing. Some are because of the events of the past year, while others were already well under way. Here are three of the key factors affecting the automotive industry.
Trend one: Online sales
The most obvious trend is the shift towards electric vehicles, but we have also seen a forced increase in online buying. New companies such as Cazoo, Cinch and others have appeared and reports across the world state that online buying will continue.
“More than a year into the pandemic, we’ve seen some major trends gather pace in the new car market, most obviously in the enforced reliance on online sales,” says Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT). “The success of click-and-collect services has provided a lifeline for the sector by sustaining sales through much of the outbreak.”
One company that launched during the height of the pandemic is Carzam. Its CEO, Kirk O’Callaghan, says the future of online car buying looks strong, with sales having increased even after showrooms reopened on 12 April. “The pandemic has accelerated a change in customer behaviour,” he says. “When customers understand the benefits of buying a car online and how they can purchase with safety and confidence, they do so.”
For many, though, the buying experience will continue to be at a physical dealership.
Hawes says: “The recent reopening of showrooms could not come soon enough, and as much as digital car buying has been proven to work, it cannot replace the excitement of choosing and test driving a new car in person.”
Some operations are even investing in new facilities. Porsche GB told us that investment by its retail partners in Porsche Centre development will continue in 2021 and 2022. It says this underlines its commitment to physical retail showrooms and follows three new Porsche Centres opening in 2020.
The same is true of large dealer groups, with Robert Forrester, CEO of Vertu Motors, finding that the use of pure e-commerce is very low, in his experience. According to Forrester, people are using online for initial viewing and video chats but most customers are then going into the physical dealership to see the actual car and complete the deal. That’s reflected in the figures, with Vertu selling 130,000 cars through its dealerships in 2020, but just 428 in purely online transactions.
As a further indicator of where Vertu sees the market heading, the company is also investing in new showrooms. “The vast majority of people are combining both online and physical,” Forrester says. “The death of the dealership is an easy story to write but I’m not sure it’s true.”
Trend two: Where design is headed
A recent survey of World Car of the Year jurors identified design as the second biggest automotive trend for 2021, after battery-electric vehicles.
Stephenson hopes the ideas around radical and polarising design will subside and says it’s being driven by marketing departments. “It’s almost like they [car makers] are in a state of panic a little bit. Most of the car companies are trying to really justify their presence in the market through design,” he says. “If they sell the car, and it looks the way it is and it sells well, they’ll continue with it. They won’t rein it back in. They are trying to show that they’re all behind it and that it’s not a mistake on their part. [They’re hoping] we will, as a general public, eventually get used to it, accept it and see it as the modern way to treat design.”