The auto industry is always changing one way or another, but it is being faced with some serious challenges, from greater regulation on emissions to addressing its role in the climate crisis. We asked our Zintro experts to explain what the next three to five years hold for the industry and in what direction does it seem to be moving.
Manuel Chaufrein, an electric and hybrid electric and vehicles business development manager, thinks that the auto industry has been faced, ever since its early development, with stronger and stronger regulations, from transport authorities regulating traffic to climate control bodies with a much greater focus coming in the past few years on pollution and climate change.
“To address these issues and constraints, starting in Japan, US and Europe, car makers have made significant efforts in improving their vehicles, reducing CO2 and overall emissions, as well as improving the ability to communicate with the traffic environment authorities and regulators,” says Chaufrein. “These recent advances are now available and take the form of car-sharing or car-pooling projects with small electric vehicles that are short range and not very enticing. Focus has not been sufficiently put toward a holistic approach, such as providing zero emission vehicles that are able to perfectly communicate in real time to be better integrated in traffic and according to the general public needs in a congested road network.”
In addition, Chaufrein says that the successful and highly profitable carmakers (most of them German) succeed in providing the best quality, reliability, low emission and communication-enabled vehicles while pursuing a strong brand image development, appealing to all. “However, due to their pricing, these improvements are mainly accessible to the richest car users as technology and innovation provides the best mark up and margin possibility. In turn, these improvements represent rather low sales volumes and impact is not directly perceivable for climate protection,” he says.
Chaufrein thinks the challenge to be taken up by carmakers in the next few years will be to combine greater profitability with a broader access for all to state-of-the art models, thus offering the communication systems mentioned above and ultra low or zero emission mobility. “I personally believe that this change will come thanks to the richest car users enabling carmakers to derive profit and later re-invest in affordable clean mobility for all,” he says. “This clean mobility change may force carmakers to invest in mobility projects for public transportation, leading to a reinvention of their business models, from steel processing and sales network management to services procurement. Some railway companies have made this change and the offers they provide amount close to 15 percent of sales turnover with greater margin.”
Marcus Paul, an automotive industry expert, says that these are exciting times for automobile consumers and challenging times for the manufacturers. “Consumers have tremendous choices when looking to purchase a new car. With advances in software, computers, design processes, manufacturing processes and materials, vehicles now are bigger, lighter, and safer and can have diesel, gasoline hybrid, hydrogen or full electric engines,” he says. “Consumer behavior is also changing. With climate change and pollution grabbing headlines on various media platforms around the world, consumers are becoming more conscious and conscientious when making purchase decisions. The emergence of car sharing services, growth in popularity in rental car agencies, and the sale of inexpensive electric scooters in WalMart stores is evidence that the private sector is reacting to changing consumer behavior.”
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