SLOWLY AND STEADY IN 2024
Following 4 years of extreme highs and lows for the automotive industry, from record-breaking increases in vehicle value to supply chain disruption due to semiconductor shortages, 2024 is poised to be a return to pre-pandemic normalcy for automotive buyers and sellers. With inventory levels expected to reach pre-COVID lockdown levels, automakers will need to be strategic in how they approach the impending buyer’s market while simultaneously keeping pace with drastic technological advances shaking the market.
HOW WE GOT HERE
Pandemic-era automotive supply chain disruption that saw automakers grasping for semiconductor supply has mostly cooled in 2024. While new vehicle supply is expected to reach 2019 levels, record-high new vehicle prices and interest rates, coupled with a weakening labor market, will limit consumer spending in 2024, Cox Automotive reports. Higher incentives & discounts will be key in navigating the impending buyer’s market.
Shifting consumer preference for more digital experiences due to pandemic-era restrictions are now expected across all purchasing experiences. Accommodations for social distancing that were once expected from the likes of fast-food chains, airlines, and the DMV are now sought out in everyday purchases. According to MIT Technology Review, Automakers are now having to rethink how they interact with customers before, during and after they leave showrooms and how technology can help facilitate seamless experiences that keep them coming back for servicing, accessories, or a new vehicle.
The transformation race from internal combustion engines (ICEs) to EVs is underway with automakers showcasing a slew of models at prominent conferences like CES 2023 and Japan Mobility Show. With OEMs expected to invest over $500 billion in manufacturing investments within the next decade, according to PWC, variety, incentives, discounts, marketing, and local and state government relationships will be vital in generating increased demand for EVs in the coming years. Growing demand for Electric Vehicles (EV) will require automakers to reallocate resources and innovate during times of stagnation.
Lastly, generative AI continues to take the world by storm as its application in everyday tasks becomes more legitimate. Once routine, repetitive business processes are now automated overnight; personalized experiences using customer data only solidified AI’s relevancy. Partnerships like NVIDIA and Mercedes that are experimenting with 3D graphics and sensory technology are already making strides in the autonomous car market.
CONSIDERATIONS FOR 2024
Activate customer-centric digital reinvention programs: Frictionless, personalized purchasing experiences will be the difference between short-term returns and long-term customer loyalty. Customer experiences that can predict vehicle preferences before they get to the showroom will deliver the convenience buyers come to expect from retailers today. OEMs like Hyundai, Mercedes, and Stellantis are already making strides to modernize the car purchasing experience through strategic utilization of cloud infrastructure and predictive AI models.
Focus on Data Quality: AI and its dependence on unstructured data for automation and predictive modeling affirms the importance of enterprise data management and talent with the technical proficiency to train datasets and optimize data storage. Indeed, preparing for AI is the most important priority for technology professionals according to the Komprise 2023 State of Unstructured Data Management survey.
Bet on Talent: Scarcity of skilled talent, rising costs of hiring new employees, and rapid advancement in AI underlines the necessity to invest in talent upskilling. Where postsecondary education institutions lag in technology, expect employees to rely on company training and upskilling programs to stay on top of the latest advancements in technology. Such investments are even cited to augment employee engagement, satisfaction, and retention rate.
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