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Eight Automotive Industry Trends to Watch in 2021

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Eight automotive industry trends to watch in 2020

The automotive market has to be one of the quickest-to-evolve market segments in the world. In the past 10 years, new auto technology has absolutely exploded, and we’ve got buzzwords like electronic vehicle, self-driving, sharing economy and hybrid to thank for that. Driven by the rapid rise in mobile technology, undeniable environmental impacts and the increasingly powerful instrument of consumer demand, the automotive industry is evolving at lightning pace, and those who don’t adapt need to prepare to get left in the dust. 

Here’s what we can expect to see from some of the automotive world’s biggest disruptors in the coming year:

1. Pay-As-You-Drive: Usage-Based Car Insurance

Why pay for anything you’re not using? That’s the idea behind usage-based car insurance, which uses telematics — in-vehicle telecommunications device — to monitor and record your driving habits and mileage and then adjust your insurance rates based on the recorded data. The National Association of Insurance Commissioners (NAIC) reports that around 20 percent of auto insurance companies will offerusage-based insurance within the next five years. Be prepared to see auto insurance marketing blasting words like pay-as-you-drive” and distance-based insurance” in the coming year or so.

2. The Sharing Economy: Consumers Sharing Vehicles

The idea of shared mobility, particularly a rise in consumers sharing cars, seems daunting to the auto industry, but the experts say it actually opens up a whole new world of opportunity for those within this market. McKinsey reports that the shared mobility market is poised to post an annual growth of 28 percent through the year 2030, which will trigger a dip in car sales (roughly a third of car sales could be quelled, says McKinsey). Auto industry leaders need to be poised to take on this challenge if they want to survive.

Erp automotive industry trends 2020
Electric and self-driving vehicles are hot

3. Analytics Galore: Big Data Informs All

Companies that want to make rapid, relevant changes in the auto world need to have the rightauto-focused enterprise resource planning (ERP) software to help them keep track of every measurable facet of their business. These days, decisions are made based on aggregate data and analytics, so everything should be recorded. In the world of mobility, recording and aggregating information can inform important company changes, whether on the micro or macro level. Companies will invest in more complex auto analytics software to help them keep track of data across the supply chain, from marketing to manufacturing.

4. Remote Updates: Always-On Connectivity

Consumers love having technology in their vehicles (and everything in their lives), but one of the biggest complaints with the digitization of cars is the fact that software updates involve making a trip to the dealership or mechanic every time they go out of date. Now, we’re looking towards a future of remote updates, including crucial software updates, safety updates and recall information, all being done in your driveway.

5. Messaging Fellow Drivers: Connected Traffic

There’s a traffic jam up ahead and you want to alert the traffic behind you to take an alternate route. A driver next to you on the highway left her gas cap open. You want to let drivers behind you know that there’s an accident on the shoulder ahead. In such scenarios, we’ve all wished there was some kind of highway messaging system allowing us to communicate with other drivers. This is, at least in part, going to be a reality in the coming years, but probably not in the way you might think. More likely, connected traffic will mean communication between vehicles in a new tech bubble dubbed vehicle-to-vehicle” (V2V) communication. So while you may not be able to direct message strangers on the highway, your car will probably be able to have in-depth conversations with fellow cars.

Connected driving
Connected traffic keeps you in the know while driving

6. Efficiency Is Everything: Longer Lasting EV Batteries

This is probably the safest bet for the auto industry, in terms of most likely to pan out. No doubt about it: as interest in electric vehicles soars, their performance and longevity will increase.Last year, Tesla released the latest versions of its Model S and Model X cars, allowing them to achieve a landmark 370 miles on a single charge. Tesla also improved the charging speed, allowing batteries to recharge their miles up to 50 percent faster. . And, as you probably know, the EV leader built the Tesla Gigafactory in Reno, Nev. exclusively to help develop even longer-lasting and more efficient batteries. We’ll be watching as other industry leaders and new manufacturers fight to compete with Tesla regarding range.

7. Industry Threats: Rising Tariffs and Regulations

The automotive industry has always been one of the most regulated in the United States, and for good reason. Mobility as a whole affects our entire society, especially when it comes to the environment and safety. Europe will also see important new auto regulations kick into place in 2020, most notably thenew EU CO2 standard, which went into place on January 1, 2020. The new standard states that, by 2030, new car emissions must be 37.5 percent lower than they will be in 2021.

8. Industry Threats: Rising Tariffs

In mid-2019, the Trump administration announced that it would begin an inquiry that could result in an automotive tariff of as much as 25 percent on imported cars and car parts. The rising tariffs on imported cars and auto parts, coupled with increasingly more stringent regulations, could change the way and the pace in which car industry leaders iterate. And since more than 54 percent of American vehicle sales are of international nameplate vehicles, these new rules will undoubtedly have an effect on the industry at large, but we can’t say exactly how just yet.

9. Smart Cars: Automotive Artificial Intelligence (AI)

AI is the buzz phrase of the decade, so it’s no surprise whatsoever that it’s impacting the car industry, too. There are many ways AI will work its way into the industry, from the obvious — i.e., autonomous vehicles — to the totally innovative, such as fixed-route driving where you operate your car but it travels along a preset route. AI has already been a huge game-changer when it comes toautomotive manufacturing technology, so we can expect to see more high-tech, automated assembly lines in the near future.

10. Faster Evolution: The Need for Yearly Updates

The experts say that yearly updateswill become the standard approach to vehicle maintenance in the coming years. In the past, updates were required every five to eight years, but with the rapid evolution of technology, both hardware and software within your vehicle will soon be updated annually. The high-speed innovation of these other trends — self-driving cars, electric vehicles, etc. — will help drive the need for yearly updates. This also means that consumers will want to upgrade their vehicles completely more often.

Autopilot ai erp manufacturing
Disruptive Is the new normal

While it’s impossible to say what things of the future will shake up the auto industry, we can predict that it will be reflective of society as a whole. As culture goes, so goes the auto industry, as they say. With consumers demanding less environmental impact, more convenience and connected everything, we can expect to see this market innovate rapidly and set standards for the rest of the consumer market.

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