Filtering fashionable buzz words from real-world consumer trends will help car retailers to face the challenges and embrace the opportunities of the year ahead.
While many industry commentators are predicting an electric vehicle (EV) tipping point and that the Government’s clean air legislation will influence consumer behaviour in 2020, a survey conducted by digital consumer intelligence company Brandwatch found that 5G, artificial intelligence (AI), and self-driving cars were generating greater “hype” on social media.
The link between the most talked-about technology and the reality of its impending impact was discussed on the IMI People Theatre at Automotive Management Live.
On social media, 5G and AI were the most discussed topics, according to 8,000 survey responses collected by Brandwatch. These form the foundations of the technology needed to support the next generation of self-driving cars.
Dean Lander, Thatcham Research’s head of repair sector services, said: “Level 3 autonomous driving technology is upon us, but Level 5, the stuff that attracts all the hype and the headlines and what most people consider to be an autonomous car, is a long way off.”
Tom Denton, e-learning development manager at the Institute of the Motor Industry (IMI), questioned the slow roll-out of 5G. He said: “One car brand has a series of systems bolted together to ensure that the car will search for a Wi-Fi or EDGE network to ensure they stay online. It’s a bit of a sticking plaster.”
Deloitte’s UK automotive lead, Michael Woodward, said 5G will be a driving force behind another trend that will directly affect car retailers.
He said: “2020 could be the year that manufacturers and dealers begin to fully realise the value of data and connectivity.
“The widespread introduction of ‘over the air’ software updates will allow new car owners to have less interaction with dealers after their initial purchase – this will likely have major implications for customer retention and loyalty.”
Isaac Abraham, Frost and Sullivan’s senior consultant for automotive business and retail strategy, said connectivity will also feed in to customers’ growing expectation of “a personalised vehicle ownership experience” through in-vehicle value-added services.
Mercedes-Benz’s Mercedes Me strategy offers customers a single log-in platform – accessible via mobile app or in-car – that allows them to tap into a series of lifestyle, mobility and shopping solutions.
The strategy is underpinned by a new CMS system, which supports a consumer’s vehicle configuration needs and a retailer’s ability to greet and better serve its customers. Online service booking and e-signatures are also part of the system, designed to support Mercedes’ push towards 25% online vehicles sales by 2025.
Woodward believes a dramatic rise in the volume of EVs reaching the UK market will be a driver of rising online new car sales in 2020, giving “much more of a focus to online as a realistic, viable alternative to the showroom”.
“Many established brands are beginning to roll out EV models and there are a lot of new entrants in the market that could add to the supply into Europe,” he said.
“In fact, current sales of EVs could be dwarfed by demand when the new 0% company car tax rates on zero-emission vehicles come into effect in April 2020.”
Hyundai launched its Kona EV online in 2018 and Geely-owned market entrants Polestar and Lynk & Co are to bring their web-based sales strategies to the UK market.
The push towards online retail could bring with it a new threat to car retailers as leasing companies use direct-to-consumer platforms, such as Zenith’s ZenAuto and Motorama.
Sandicliffe Motor Group’s Sandicliffe Motor Contracts business and Inchcape’s Inchcape Fleet Solutions left the leasing sector recently and Woodward suggested that a disproportionate amount of EV volume may be handled by leasing companies in the year ahead.
Woodward said: “Larger leasing companies are already reporting double-, and in some cases triple-digit growth in orders for EVs.
“Some leasing companies could see EVs occupy more than 50% of new orders on their books in the next two years.”
Brexit and the impact of the forthcoming UK general election will probably have a greater impact on consumer behaviour than these technological advances. But new technology and emerging consumer trends will play their part and, either next year, or further ahead are sure to prove more than mere social media hype.