The state of the car industry can be summed up in two words: fiercely competitive. In 2016, 44 automotive brands offered over 400 different model types to UK customers. Keeping up with consumer expectations in a crowded market can be difficult, especially when the industry in question is plagued by long production cycles. A vehicle that looked perfect two years ago might be a market dud once it comes off the production line. Not just that, but the mistake can last years as manufacturers can’t roll back production as other industries can.
Despite this, the automotive industry has enjoyed growth over the decade, and so far remains immune to disruption experienced by other sectors like the hotel industry with Airbnb, or Blockbuster and Netflix. The biggest change however, is the way consumers choose to go about purchasing and using cars.
For example, the growth of online car marketplaces like Autovolo, WeBuyAnyCar and WeWantAnyCar are empowering the consumer by letting them choose and streamline the process of selling cars. The Autovolo website takes you step by step in this process, and offers to pick up your vehicle and take it to their warehouse.
Social media and technology have given the customer more freedom. With just a few taps on their smartphones, customers can get all the information they need from a vehicle. Gone are the days of the salesman knowing what’s best for you, the consumer can now decide what they want, when and how.
More informed customers mean more factors that come into a purchase decision. Aligning product positioning, marketing messages and the needs of the consumer are apparent and visible online. Customers now prefer a relationship with what they’re buying, and with so many competing car companies on the market being informed on a significant choice, like a vehicle, is more crucial than ever.
By 2020, 40% of new car owners will be millennials, 88% of which use the internet to research a car purchase. It’s evident at this point that a robust online presence is necessary to connect with the next generation of buyers. Knowing your buyer beforehand will set up the UK car industry up for success in the next coming years, but it goes beyond being visible during the buyers’ research process.
Monitoring online conversation about the competition will help the industry understand what influences future purchase decisions. Although certain brands have a positive association that makes them stand out from the rest, (Honda is reliable, Volvos are safe, Jaguar and luxury) car manufacturers will need to also be approachable in the years to come.
The biggest threat to the automotive industry remains to be themselves; if they don’t change to the current trends, they could fail and become a thing of the past. Technology-driven trends like self-driving cars, electric cars, and rideshare apps are giving us a glimpse of how the UK car industry will look like. It will be automatic, and it will be fast. Listening to the new generation of consumers will drive the UK car industry into the future.