Is technology the key to succeeding in today’s automotive industry? And how can technology drive success in automotive dealers?
To answer these questions, let’s first take a look at the automotive market.
The automotive industry comprises a wide range of companies and organizations involved in the design, development, manufacturing, marketing, and selling of motor vehicles.It is one of the world’s largest industries by revenue. The automotive industry does not include industries dedicated to the maintenance of automobiles following delivery to the end-user, such as automobile repair shops and motor fuel filling stations.
AUTOMOTIVE MARKET OVERVIEW
Worldwide car sales and car production in 2018 recorded the first drop of the last nine years, and 2019 is expected to remain challenging for the automotive industry, which has a value of USD 5,800 billion. Sales of new light vehicles should drop in the US (-2 percent to 16.8 million units), due to less sustained financing and increased competition with the growing second-hand market.
In China, the largest car market (accounting for more than 29 percent of global sales last year), sales began in a slow pace in 2019 and should only gradually benefit from a recovery in consumer confidence tax incentives and emission mandates – two issues that led to the first drop in sales after nearly three decades in 2018.
What dealerships need to understand is that they cannot get by on short-term strategies and trying to use discounts to clear stocks. After a while, it will stop yielding results…or come at a great cost.
The automotive industry began in the 1860s with hundreds of manufacturers that pioneered the horseless carriage. For many decades, the United States led the world in total automobile production. In 1929, before the Great Depression, the world had 32,028,500 automobiles in use, and the U.S. automobile industry produced over 90% of them. At that time, the U.S. had one car per 4.87 persons.After 1945, the U.S. produced about 75 percent of world’s auto production. In 1980, the U.S. was overtaken by Japan and then became world leader again in 1994. In 2006, Japan narrowly passed the U.S. in production and held this rank until 2009, when China took the top spot with 13.8 million units. With 19.3 million units manufactured in 2012, China almost doubled the U.S. production of 10.3 million units, while Japan was in third place with 9.9 million units. From 1970 (140 models) over 1998 (260 models) to 2012 (684 models), the number of automobile models in the U.S. has grown exponentially
BUYERS ARE CHANGING THEIR BUYING HABITS
More than 50% of customers start their research with a search engine query. Today’s digital-savvy auto shoppers visit the dealership less, relying instead on online research, mobile and video to stay informed and make decisions. When they do walk into the dealership, the customer is armed with a staggering array of information. Delivering on research needs and inspiring the customer is critical – dealers that succeed in this are more likely to win the sale.
Typically, customers decide which car to buy within 2 months of beginning their search, shifting between online and offline channels at 4 times. They expect their preferences to carry across channel boundaries, so they don’t have to repeat themselves. Those dealers that fall short of providing a seamless omnichannel experience risk losing the customer.
The buying behavior of customers today offers car dealerships ample opportunity to improve and boost car sales. To start with, they need to engage with prospects as soon as they begin their search online, using intelligent targeting and analytics to identify prospects and provide them with useful information such as educational videos on the car’s looks, features, and benefits lists.
Dealers should drive prospects to visit the dealership website for a more extensive experience with the relevant car brand and model.
There’s a modern way to consumerize the car buying experience. With an ever-increasing number of channels, delivering seamless consistent service has never been more complex. Software can solve complex customer service by making it simple. Learn more in this white paper, Succeeding in Today’s Automotive Industry.