New head of electronics at Audi
September 28, 2016
Whitfield outlines motor industry objectives
September 29, 2016

Auto industry shifts gear

This post has already been read 452 times!

Embrace change or suffer the consequences – that was the automotive message from a host of speakers at last month’s CAR Conference at Kyalami’s Festival of Motoring

Thanks to the digital revolution, the global automotive industry was evolving quickly, making it essential for motor businesses to embrace change or suffer the consequences.

That was the missive delivered last month at the CAR Conference at Kyalami, part of South Africa’s Festival of Motoring.

In an opening address, Martyn Briggs, an automotive analyst at Frost and Sullivan in the United Kingdom, spoke about megatrends in mobility, setting the scene for a number of presentations that followed.

According to Briggs, the mobility industry was working towards a convergence of initiatives involving electric, connected and autonomous-drive vehicles. As a result, the automotive landscape was shifting gear.

A key result was the creation of business platforms which leveraged information and data to offer improved services aimed at reducing costs, journey times and pollution levels, and which contributed positively to health and wellness.

The underlying logic was that consumers were ready to change their mobility patterns for a better alternative – especially in urban areas – by moving away from privately-owned cars towards increasingly multi-modal transport solutions such as on-demand shared mobility services available through smartphone apps.

That’s one of the reasons, Briggs said, that OEMs were beginning to invest heavily in ride sharing and other service-related platforms, creating different types of vehicles to meet a variety of demands and developing new, more ef cient ways to manufacture them.

He predicted that, by 2020, the automotive industry would have moved to a 5G network in terms of vehicle connectivity, enabling it to harness mobility data which, in turn, would be monetised. “Meaningful data sets will generate incremental revenue,” he maintained. “The boom in the number of satellites being sent into orbit to enable 5G will make our cars cognitive and intelligent.”

In terms of current trends, Briggs said digital dealerships using small showrooms in shopping malls – with only one or two cars on display and business concluded online – were proving to be increasingly successful in the UK. It was his belief, he said, that the trend would become global.

“The internet and the availability of data are transforming the way we buy products,” he said. “People are thinking up smart ways of linking supply and demand without having to own any assets. The trend in mobility is away from ownership to access – and that goes for dealerships, too.”

Another speaker, Shayne Mann, managing director of a brand experience company, reinforced the point. “Technology is disrupting every industry worldwide and motor retail is not going to be spared. Disruption is coming from online retail to driverless cars – and those who don’t learn to innovate now will nd themselves left behind,” he warned.

Mann, who has been involved in developing virtual automotive showrooms for local dealer groups, said it was time for a reboot in the retail motor space – not necessarily to throw away the expertise and physical footprint offered by traditional dealerships, but rather to re-imagine their role in an uncertain but exciting future.

Chris de Kock, managing director of WesBank, one of the country’s leading vehicle nance houses which was the main sponsor of the Festival of Motoring, picked up the theme regarding the need for change.

He said that the traditional linear processes of buying a car – search, sell, nance, buy – were inef cient, lacked personalisation and proved expensive for the customer. He said WesBank was considering various digital technologies that promised to deliver a better experience.

The need for change in the automotive retail space was reinforced by Dave Duarte, founder of Treeshake, a consultancy dedicated to growing digital marketing capability, who also served as the conference’s master of ceremonies.

He set the scene by explaining that the growth towards a digital world in South Africa was driven by the fact that the number of active website users in the country amounted to 18-million people.

He said a recent survey had shown that 45,9% out of 1 000 people locally would be willing to buy a car online and that only 17 people out of more than 4 000 interviewed in another research project had indicated that they were satis ed with the traditional car buying process – all the others wanted change.

When it came to doing business online with potential customers, Duarte warned dealers that quick responses would be necessary. “They are not prepared to wait long for feedback to queries,” he said.

Leave a Reply