And, with experts forecasting another dip in new-vehicle sales, automakers must begin exploring new revenue streams. Below are three key trends we can expect in the auto industry this year, with tips on how automakers can use these trends to fuel success in 2020 and beyond.
As consumers increasingly expect more flexible consumption models, they are exploring nontraditional mobility options. Vehicle subscriptions are popping up everywhere — major luxury brands such as Audi, BMW, Cadillac, Mercedes-Benz, Porsche and Volvo have launched services.
IoT has paved the way for the “as-a-service” business model by introducing low-cost sensors, powerful embedded controllers and wireless communication. With a strong IoT network now available, manufacturers can combine remote monitoring with data analysis to facilitate predictive maintenance, reduce machine downtime and optimize productivity.
Automakers have made headway into greener business practices with the proliferation of electric vehicles. However, in 2020 and the years to come, automakers will aim to reduce waste and use fewer natural resources as the circular economy takes hold.
The way value is created in business today is very linear: We use natural resources to build a product, sell that product into market and dispose of it at the end of its life cycle, filling up landfills and using energy to continuously dig for natural resources.
We’re seeing the circular economy in consumer brands such as Adidas and its Futurecraft Loop shoe. Consumers return the shoe to Adidas once they have worn them out and the shoes are repurposed for future Loops. It’s inevitable that this same model will make its way to the automotive space, as governments, consumers and Wall Street will all expect to more sustainable business practices.
And, with automakers increasing their focus on delivering vehicles as a service, many will begin thinking about how to design products that can be reused, repaired, recycled and redistributed. This will impact teams within the entire organization — from r&d to sales, service, finance and more.