What is the future of the automotive business?

12-06-2017 | Redacción CEU

The automobile sector in Spain is one of the industries that has experienced a big growth in this economy hit by the crisis. Car sales in our country have increased by 11.7% on the past month of May. In particular, this market has grown by 7% since the beginning of the year. It seems that the automotive companies are in luck. Do you want to know the ins and outs of this "engine" of the economy?

 

The prosperity of the automotive business does not go unnoticed. It is one of the fields with really good economic expectations. That is why it is very important catching up on the news about this market. In this article we provide you a brief overview about the trends and the development of the motor business. What are the companies working on? What is being sold and what is not? What is the future of the automotive sector?

Picture of the automotive market

  • Sales to "rent a car" expand in Spain

The arrival of the summer has meant an increase of vehicles sales to companies that manage the car rental business. The sale of these companies added up to 40.240 new vehicles the last month –18% more than in 2016–. That is a relevant amount of market share. Tourism has been decisive on the growth of this business area.

  • Considerable decrease of diesel automobile sales

The impact in the environment of the use of these fuels is affecting the loss of diesel's hegemony as a fuel in Europe. Legislation is increasingly restrictive and is causing the change of consumption of individuals and companies. It is the first time in a decade that diesel cars have not been the bestsellers vehicles in the continent. On April, numbers fell around 15% regarding the ones collected that same month on the past year. The registration of this kind of vehicles is below the 50% –a record figure–.

  • The demon of the "dieselgate" has changed the rules of the game

The famous case of ‘dieselgate’ has unleashed a series of changes worldwide. Not only it has influenced the drop of diesel car sales, it has also encouraged the electric car sales. In the other side, the European Community thinks about toughening the legislation about emissions. At present, the member countries have agreed to examine the emissions of the cars that are currently on the road.

  • Cars do not need a driver

Vanguard is the insignia of the automotive industry. The automobile design demands an increasingly complex engineering and a digital project under continuous development. Self driving cars are around the corner. Google, Uber, Tesla, Apple, Toyota, Mercedes-Benz,... all these companies work in the production of an autonomous car.

  • Big Data is becoming more important

The automative companies are using the data analysis in the car manufacturing process to optimize the production and minimizing the risk of failures in the assembly lines. Not only this, Big Data is also transforming  costumer service. They are getting data about the use of the vehicles for the development of an intelligent care. For example, a car will notify us that it needs an urgent oil change. The connectivity of cars is another trend to bear in mind.

  • Car sharing is the new way of transportation

The personal transport has reinvented itself, one of the most noticeable changes is the use of car sharing. It is a trend in big cities and digital platforms that work on car sharing do not stop registering new costumers.

  • Emergence of the hydrogen cars in the automotive market

The legislation and demand push automobile industry to look in other directions and to search for new energies like the liquefied petroleum gases or the biofuels. Nevertheless, the motor business seems opting to use  electricity. Facing the 100% electric cars that need recharge of batteries, the hydrogen cars development is being impulsed. For example, in California this kind of vehicles are already on the road and the first refueling stations have been installed. 

  • Will cars fly one day?

That is the intention of Toyota that is attempting to fabricate a flying car to open the Tokyo Olympic Games in 2020. The Japanese company has set itself this ambitious goal. At present, the first attempts published by social networks do not seem encouraging. But it is definitely another challenge that has set out in the future of motor world.
 

What is the future of the automotive business?

The challenges of automotive companies

Some will think that being this a sector with a big growth, the job of an automotive executive manager will not require much effort, which is far from reality. In fact, working in an environment in constant evolution and with a so defined innovative profile, the challenge is even bigger. 

  • Generating interest in individuals sales

The car sale to ‘rent a car’ companies has achieved to palliate the slow growth of individual sales. In detail, the sales to this target have increased by 6% the last month, but only by 2.1% compared to the last year. This market area runs the risk of becoming stagnant. The challenge of entrepreneurs that work on automotive sector lays on stimulating the individual sales. If they do not get it, they will lose a big market share.

  • Pioneering in innovation and digital development

Just like the academic and manager of the Executive Master in Management of Automotive Companies Jose Manuel Garaña claims: the automobile industry develops <<one of the most technological products that exists in the market, beyond mobile phones and almost comparable to computer world>>. For this reason it is essential to be aware of the competitor's progress and being pioneer in innovation.

  • Adapting authorized dealers to the new costumer's profile

Clients are now better informed and have a very noticeable digital profile. The interaction with costumers require a deep knowledge about the product and a redesign of the marketing strategy. We also have to take into account the new practice of digital sales, the development of new experiences and the movement of car sharing. On balance, the dealers have to transform their business model. 

  • Being competitive implies having capacity to change

The entrepreneur must be open to changes to become a leader. Whoever is not willing to accept it, will be left behind.

The future of the automotive sector is here, and just like the American entrepreneur Henry Ford said:

<<When we think that tomorrow will never come, it has already become yesterday>>