Unprecedented technological advancements. Shifting consumer preferences. Increasing environmental awareness. It’s an understatement to say the automotive industry is changing at a rapid pace.
It’s impossible to predict precisely what the automotive world will look like in five years. But we’re confident that the industry, which for more than a century has innovated to bring consumers the freedom of mobility, will continue to do so — even if tomorrow’s transportation solutions look very different.
Breakthroughs in technology, materials science, and engineering are continuously reshaping the industry — a process further amplified by the urgent need to address climate change and embrace sustainable transportation solutions. For example, ride-sharing platforms, and micro-mobility solutions will augment traditional ownership. From the customer experience to the vehicles themselves, to changing societal views on transportation, automakers will need to be nimble and proactive to retain their leadership role.
While nobody can foresee the future with certainty, original equipment manufacturers (OEMs) can and must prepare for it. Here are some of the emerging shifts we’re discussing with clients:
Culture and society
With Millennials (those born between 1981 and 1996) well into their peak earning years, and Gen Z (those born between 1997 and 2013) establishing careers and considering big-ticket purchases, OEMs can’t afford to ignore younger consumers’ values as they relate to cars.
These youthful customers are tech-forward. They prioritize sustainability, efficiency and convenience over muscle and styling. They see their vehicle as a tool that enables their lifestyle — the on-the-go urbanite, the up-for-anything weekend warrior and so on. They demand vehicles that offer a range of high-tech features and services. And they’re more likely to embrace alternative transportation modes to reduce both the cost of ownership and their environmental footprint.
- From performance to features: Many young consumers look first at a vehicle’s innovative digital feature set. Driver assist, automation, sensors, connectivity, entertainment, navigation, voice control and more are being constantly innovated to satisfy these car buyers.
- From status to lifestyle: Today's buyers express their individuality and fuel their passions through their vehicle choices. From adventure-seeking off-roaders to eco-conscious electric vehicle (EV) buffs, these consumers view their automobile as an extension of their personality, unique interests and deeply held values.
- From ownership to mobility-as-service: Young people are driving less and are slower to pursue their driver’s licenses. For some, traditional car ownership has been augmented or replaced by car-sharing, ride-hailing and micro-mobility options (e-bikes, Segways, etc.) among others.
Technology and connectivity
When new tech paradigms emerge, people make sense of them by relating them to what they already know (thus “horseless carriages”). While the next generation of cars will borrow heavily from the look and feel of their predecessors, they may be quite different: moving physical-digital platforms that enable new experiences in communication, productivity and entertainment.