To complement our newly tailored solution-by-mobility-vertical page for automotive clients, this article sheds light on the auto industry and the need for manufacturers and dealerships to level up their customer experience game if they want to succeed in the future of mobility. Learn here about
- Market trends
- Why consumers are buying fewer cars
- How automotive brands should leverage customer feedback to scale
The automotive industry is aware of consumer preferences for on-demand and alternative transportation services and, therefore, provides relevant products and services to meet those needs as transportation preferences change.
As Joachim Skarpil, Head of Automotive Suppliers at Capgemini, explained in her webinar:
The future innovations will be achieved by software components, and each automotive supplier needs to find its own individual answers. So, new products or other products with new services and new business models need to be developed. In the future, automotive suppliers will have to be more flexible and even faster than ever before.
However, amidst all the turbulent market changes, let’s not forget that automotive companies should not overlook the experience they offer to their existing customers. Whether it’s been 20 years in the making, five years, or so on, original equipment manufacturers (OEMs) that design and build innovation based on consumers’ needs will see bigger and brighter days in the future of mobility.
In addition, with this gradual shift, car dealerships are also finding themselves in a position to grow as fully integrated transportation providers. Yet, in reality, what does that mean?
Let’s find out.
Trends in the Future of Mobility
Mobility is a customer-centric concept; every transportation product and service must be designed and built according to the consumers’ preferences, needs, and habits. As consumers’ transportation preferences evolve, this gives rise to mobility used as automotive services, such as ride-hailing, car-sharing, and subscription-based models.
As Forbes shared, here are some real-world examples already underway:
- Self-aware, intelligent cars that provide a platform for new business models
- A vehicle equipped with dozens of data-driven sensors and engine control units (ECUs) that can connect to the internet
- The growing trend in bundling new car sales with subscription-based offerings for parking, charging of electric vehicles, ridesharing, and car share services
- Using data from connected cars to provide algorithm-driven insurance policies
- While the number of fleets is already at an all-time high, the number of charge points is expected to grow and expand as more electrified fleets become deployed.
Why are people owning fewer cars?
The global automotive industry has seen a decline in sales in recent years. Global automotive sales were estimated to be 59.5 million in 2020 despite COVID-19, a 20% drop from 2009:
It was also predicted that 80 million cars would be sold in 2019, but the number resulted in being lower. 2020 was expected to experience more decline because of the COVID-19 lockdowns and its overall economic downturn.
Yet, people were still moving about despite public transport and air travel having been reduced due to limited mobility during the pandemic. For example, in dense urban areas, the growing popularity of bicycles and scooters signified the consumers’ interest in alternative modes of transportation.
Those like micro-mobility OEMs, or e-scooters and e-bike sellers, are selling directly to consumers rather than to businesses. Mobility-sharing platforms, such as Lime, gained traction after they adapted their revenue models to match consumer needs. They started to offer rentals on a daily, monthly, or even yearly basis.
External competitive forces like ridesharing giants (and outsiders), Uber and Lyft, have disrupted the traditional automotive industry. The sector as a whole has increasingly become an attractive investment opportunity for tech companies, venture capital funds, and private equity brands.
The shift from ownership to access
There’s an even deeper “why” or reason underlying the lower number of vehicle ownership on a global scale. As consumers’ needs change, the automotive industry is increasingly shifting from an ownership model toward a Mobility-as-a-Service (MaaS) access model, especially for meeting the demands of millennial customers.
According to McKinsey, this first-generation of integrated-mobility consumers will become the largest new-car-buying demographic with:
Over 45% of the potential vehicle-purchasing cohort in 2025 will be made up of millennials.
People want to pay for temporary access to products and services that have been traditionally bought outright. For instance, look at widely-popular usership services like Netflix, a video-streaming service, and Rent the Runway, an e-commerce platform that rents high-end clothes and accessories.
Also, it’s not just about personal economics or reduction in ownership costs driving this new behavioral trend since sometimes customers pay more to access products and services. It’s also about people’s changing inner values.
They’re re-examining the definition of ownership – what does it mean to own something?
Is permanently having this more valuable than accessing it whenever I feel like it or need it? Some could even say that access equates to ownership.
A 2018 mobility study further supports the fact, with about 4 out of 10 shoppers believing that transportation itself is well needed but owning a vehicle is not (and that belief has only grown since 2015).
Source: Cox Automotive – Consumer interest in car ownership will shift to a desire for mobility access.
What Does It All Mean for Automotive Companies?
The consumer’s perception of access greatly impacts the transportation sector, and automotive dealerships can capitalize on this opportunity. This all means for automotive brands that when there becomes more and more convenient access to alternative transport methods for customers, they will likely use those services more than the dealerships’.
Therefore, it’s now or never for OEMs to better understand consumer preferences and adapt to them. Automotive brands need to explore new business models that don’t necessarily require the customer (user) to own a vehicle and encounter all the hassles that come with it. The key is to keep a cool head in the game and advance the customer experience to reflect new market transformations.
Driving the Automotive Customer Experience Forward with the Best-In-Class Closed-Loop Customer Feedback Management Program
One major effective solution for automotive leaders to go ‘fast and furious’ on the customer experience is to leverage consumer feedback.
Artificial intelligence-enabled dashboards, such as Wonderflow’s Wonderboard system, can be implemented to help offer insights into the customer journey and the customer satisfaction score (CSAT) and overall progress, showing where specific touchpoints work and where they need improvements.
Reinforcing user feedback through a closed-loop customer feedback management process can help to measure CSATs systematically. As such, some examples of benefits include:
- Performance indicators and customer surveys that help automakers anticipate customer needs and generate alerts for dissatisfied buyers, thus enhancing customer service
- Automotive experts are kept well-informed with continuous performance dialogues and transparent incentive schemes, plus continuous action planning and improvement done at the dealer level
- Through ultimately achieving transparency, manufacturers can better their relationship and communications with dealerships
Stop reversing now and start moving forward by booking a free demo with one of our VoC experts.