Blogs/Vlogs

The exaggerated impact of the megatrends for the automotive sector

5 November 2018

If you believe the recent media stories, the future of the retail automotive sector is bleak, with the death of individual car ownership and a move towards a mobility service provided by autonomous electric vehicles. With these stories becoming more regular in the press, it is concerning that the consumer will start to believe the hype which is far from reality. There is no doubt that the sector will change and challenge in the coming years, however this extreme scenario is a long way from reality in our opinion, especially when it comes to the speed of change.

The main global megatrends, as reported by ICDP, are alternative fuels, vehicle autonomy, connected cars, purchase and usage restrictions and transport as a service. When we consider these in relation to the short term and long term impact on the dealership model it is a complex and challenging debate, especially with some cities introducing elements of the change due to environmental and urbanisation challenges, eg. diesel vehicles being banned from city centres.

One of the most widely reported headlines is that of the electric vehicle which is coming – many manufacturers already have a hybrid or fully electric vehicle available with numerous new models set to hit the market in the next couple of years. What has not perhaps been appreciated is the charging requirements of these vehicles and the convenience that consumers will require for it to become viable. Energy storage proposals are continuing to develop, however until a consumer can have a “fast charge” available conveniently, it may be a challenge to gain significant traction. Changes to the UK tax regime around vehicle emissions will certainly focus the consumers buying behaviour as the government focuses on a Road to Zero policy.

The discussion surrounding autonomous vehicles theoretically allowing cars to drive themselves does feel a way off – complexities around insurance, risk and technology make this a challenge, however it could become a convenient option on vehicles perhaps stuck in traffic or heavily congested inner city areas. Importantly, it certainly does not feel like this industry development will be any time soon and maybe not even in our lifetimes.

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