The automotive landscape continues to change with the rise of the Internet of Things (IOT) and machine learning that are paving the way for the car companies to design and build incredibly powerful and technology-enabled vehicles.
Car companies are exploring a vehicle as a service business model, where a customer’s purchase becomes a desired result or output of a product rather than the product itself. Auto experts are forecasting another dip in global new-vehicle sales, so they must begin exploring new revenue streams. Below are three key trends we can expect in the auto industry in the short term.1. Subscription vehicles
Younger consumers are looking for more flexible vehicle solution, exploring non-traditional transportation options. Vehicle subscriptions are popping up everywhere. The benefits of insurance and maintenance, coupled with unlimited access, could become increasingly appealing to consumers.
2. Internet of Things (IOT) adoption expands
IOT technology from here on especially relating to subscription vehicles will be a key to monitoring vehicle performance and forecasting when a service is needed.
Car companies will add low-cost sensors, powerful embedded controllers and wireless communication to their vehicles to combine remote monitoring with data analysis to facilitate predictive maintenance, reduce machine downtime and optimize productivity.
3. Vehicle sustainability
Governments and customers are pushing hard for car companies to make more headway into greener business practices with more sustainable options. For 2020 and the years ahead, their aim will be to reduce waste and use fewer natural resources as the circular economy takes a stronger hold.
Based on the ideal that we use natural resources to build a product, sell that product into market and dispose of it at the end of its life cycle, rather than filling up landfills and using energy to continuously dig for new natural resources.
With car companies increasing their focus on delivering vehicles as a service, many will begin thinking about how to design products that can be reused, repaired, recycled and redistributed. This will impact teams within each entire operation, from research, development, manufacturing, sales, service, finance and much more.
This year is shaped to be a key time for the automotive industry to see how well it adapts to these trends. Ultimately, the journey to fully delivering products as services will take some time, but if handled correctly, the benefits for both manufacturers and their customers will prove well worth the effort.