As we close out 2020 and enter 2021, we’re still adjusting to our “new norm.” Below are five anticipated trends we anticipate will prevail in the New Year.
2021 will be the year of the personal car
Public transportation has seen a drastic decline, as many commuters aim to avoid areas of close confinement such as public buses and subways in light of a highly contagious coronavirus that’s spread by close contact. Public transit isn’t the only mode of transportation losing riders; shared mobility models have declined as well.
Although there’s currently a decline in car purchases, all of these aforementioned factors—paired with governments around the world offering substantial tax cuts and subsidies for electric vehicle (EV) purchases—will lead to a stabilisation, or at minimum, a softening of the sales decline over the next 12 months.
2021 will bring EVs…everywhere
Already a hot commodity in certain countries, next year will bring EVs to even more regions, thanks to a myriad of interconnected factors: government subsidies, new models, battery mileage improvements, charging infrastructure commitments, and more consumer confidence.
Additionally, electric battery cost production will soon become more competitive with internal combustion engines, even without government subsidies. This development increases the pressure on successful transitions to new vehicle architectures. Unfortunately, it also increases the pressure on margins, since EVs often have higher cost and investments. Still, we’ll see more consumer interest, especially in response to highly competitive pricing.
Customer engagement will continue to shift from in-person to immersive digital experiences
In an effort to attract consumer interest in an already oversaturated online landscape, automakers will continue to creatively reconsider how they digitally market cars. In fact, 2019 already saw close to 825,000 online new vehicle sales globally and we should expect more, as trips to local dealerships drop in the wake of COVID-19.
Next year must bring even more interactive, engaging ways to connect with consumers virtually — such as providing more photorealistic materials and 360-degree views. It will be paramount that potential purchasers can still experience a car in the comforts of their homes.
Cloud computing will see a considerable uptick, specifically in optimisation
Carmakers have already taken to cloud, whether it’s been Renault Groupe accelerating Industry 4.0 with cloud or Fiat Chrysler Automotive using cloud technology to innovate and glean consumer insights at the individual dealership level.
2021 will see car manufacturers becoming more and more confident in their path towards the cloud, specifically focused on infrastructure optimisation. Most importantly, there will be opportunities to unite on-prem and cloud computing across multiple cloud vendors on one easy-to-manage cloud platform, offering more choice and flexibility.
Pressure on margins will result in a renewed focus on cost reduction and efficiency
With shrinking profit margins from large electrification investments and COVID-19 management, automakers and suppliers must focus on efficiency. Long gone will be the days of building proprietary data centres, when outsourcing can instead help reduce operational costs and increase shop floor efficiencies. Additionally, artificial intelligence and machine learning can serve as a technology driver to achieve these goals, without having to invest heavily in renewing legacy applications.
With digitalisation as a main source of further efficiency gains, there will be a growing ecosystem of technology partners that can enable significant, short-term contributions to support automakers’ profitability.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Dominik Wee is Managing Director Manufacturing and Industrial at Google Cloud
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