2021 was a strange year in many ways and all signs point to 2022 continuing to have its discernible quirks, especially in the automotive industry.
At first glance, and most topically pressing to Canadian automotive manufacturers and really, anyone in the auto industry in both Canada and Mexico, US measures supporting US-manufactured electric vehicles (EVs) have the potential to devastate.
But, I’m getting ahead of myself. As I look back on the year, there have been significant lessons learned in my latest venture, Autozen, including what to watch for in 2022.
Lessons learned in 2021
The importance of the global microchip shortage cannot be underestimated and warrants more respect. Chips are a major part of building a car, and it isn’t just a matter of ordering them from outsourced suppliers. Barren car lots with dealers scrambling for quality, pre-owned vehicles was a testament to how reliant we are on these microchips.
In addition, the automotive industry is seeing pressure vectors from many directions, simultaneously. Response speed into action and the strength of vision are key, especially looking at EVs, microchips and distribution models.
Increased agility, flexibility and adaptability in distribution networks is essential for growth and competition, but old habits are hard to beat. Very often, what you think you know is not actually what you need, and the auto industry needs to be ready to relearn many fundamentals.
Across all industries, consumers do not like to be sold to. They want information and exceptional service. Any opportunity to escape older or inefficient ways of doing things are quickly and irrevocably grasped right away.
There is a merging of the offline world onto the online experience. We are in a phase of reinvention of the offline world, and that is showing itself in ways like the impact of organic, earned, consumer reviews. These user generated reviews from sometimes offline experiences, find their ways online and at the ready fingertips and eyeballs of consumers. These earned reviews are often worth more than any paid campaign or advertisement.
And now, we move to predictions of trends I expect we’ll see in 2022, many of which have already started and are simply gaining momentum at an accelerated pace.
Trends for 2022
E-commerce will continue to be strong, accelerated by the necessities of COVID-19. Online purchasing for increasingly large ticket items will continue to thrive. Even as something of a return to normal happens, the consumer is now more comfortable with online transactions and more demanding. For businesses to succeed, they’ll have to do more than keep up, they’ll have to innovate and drive faster than the consumer’s expectations.
The consumer experience will continue to improve for most automobile players, from OEMs to dealers, to marketing intermediaries. Seamless experiences from online to offline will be the norm, with no reverse in trends to pre-COVID behaviours. E-commerce is here to stay and continue to grow, (albeit with maybe a bit slower growth).
Self-driving technology might surprise us with its rapid and accelerating progress. Though fraught with risks, just look at Tesla, this area also shows enormous growth potential and could grow into markets that were not part of the original plan.
Subscription models could grow quite fast – but the challenge is and will remain to be how to make it profitable, as it is an expensive, though enticing practice. People are ready to test more automobiles, you could think of it as “leasing 2.0”, with full flexibility for the consumer. But so far, it has not been profitable, so to succeed, dealerships will have to find a way to make it profitable.
Cars are really getting smart. They communicate better with us, know us better, are connected to us on multi-platform. Cars may become part of us, not unlike how phones have become full control mechanisms of our lives, cars can anticipate our behaviours, needs and it will become more of a relationship, the dynamic of cars and owners, than perhaps we ever anticipated.
Most topically, OEMs will provide a stronger line-up of EVs, but the whole market of EVs manufactured in Canada is already in jeopardy because of the pending trade war with Canada and the US over credits to US-made EV cars but not on Canadian-made cars. This is a scary area to watch, particularly as so many incredibly innovative Canadian companies are releasing their own EVs, competing with Tesla or Toyota. We’ve seen a surge in Tesla sales on our own platform, expedited in the past few weeks, alone. It is a curious time to observe EVs and I can’t help but wonder if we’re not on the verge of a new trade war.
There is much to look forward to but also much to watch, with caution. I am excited to be along for the ride.
Olivier Vincent is the CEO and co-founder of Autozen.
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