After facing many challenges in 2020, the automotive industry is once again buzzing. Forbes predicts an 8% year-on-year increase in sales, expecting the market to recover some of its losses in 2021.1 Here is a look at a few trends that are set to impact car buying this year.

Increased Demand to Own Vehicles

During the COVID-19 pandemic, consumers gravitated more towards private car ownership. Many of those who don’t own a vehicle were considering a purchase. The appeal of personal transportation has cut into the popularity of ride hailing services and public transportation options that were thriving before the pandemic.

Requests for At-Home Delivery

Dealerships had a few online services available before 2020. Nowadays, they have had to keep up with customers’ demands for at-home delivery of vehicles. It is now possible to buy a car without ever visiting a dealership in person.

Digital Events on the Rise

Digital events and presentations by manufacturers and dealerships are becoming more widely accessible to consumers. If there’s a new vehicle being introduced, consumers may be invited to live streaming presentations that demonstrate new features in detail. Those who can’t attend the live presentation won’t usually miss out; they can stream it at any time.

Higher Demand for Midsize Vehicles

Sedans have declined in popularity for a few years. However, mid-size models represented a greater share of registered vehicles than compact models in 2021, according to automotive research firm IHS Markit.2 Consumers are gravitating towards sport utility vehicles. The trend is even more evident for luxury models, but overall, the high consumer demand has strained new vehicle inventories. This has forced dealers to refine inventory management through more sophisticated data analysis techniques.

Electric Vehicles

IHS Markit has also predicted that EV sales will rise by 70% this year, and global sales will reach 12.2 million by 2025.3  Market share is set to steadily increase in 2021. Thousands of dealerships across the nation are embracing the trend and preparing to sell electric vehicles. No longer a novelty, EVs represent a change many franchises are ready to take on as demand has increased and numerous technologies have advanced.

New Regulations

A variety of government regulations and tax credits are encouraging consumers to purchase electric or plug-in cars. Although the number of charging stations is increasing, there is still a lack of places to charge up. And while prices are high and some technologies still experimental, government incentives are spurring growth in the EV market.

More Autonomous Features

A fully autonomous vehicle won’t be available for another 5 to 10 years according to some experts. There are still concerns over safety and how to program such a vehicle. However, autonomous settings such as collision avoidance, lane departure alerts, street sign recognition, and others are appearing in more and more car models and brands. Tesla, Ford, Audi, and Tesla are just some manufacturers that have introduced an autopilot-like feature that enable cars to run independently of drivers in ideal conditions.

 

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Source:

  1. https://www.forbes.com/sites/sarwantsingh/2021/01/27/top-10-global-automotive-trends-2021/?sh=65e6a89605b5
  2. https://ihsmarkit.com/research-analysis/an-automotive-minute-a-shift-to-midsized-vehicles.html
  3. https://ihsmarkit.com/research-analysis/ihs-markit-forecasts-global-ev-sales-to-rise-by-70-percent.html