The holidays are behind us, and the new year lies ahead. What do recent developments in the technology and automotive industries suggest for 2019? How can and should dealers prepare themselves, and where are the opportunities to get ahead of the competition?
Here’s some news to consider:
What: Amazon passed Apple and Microsoft to become the world’s largest company, measured by stock market valuation.
Why: The big brown boxes on front porches – and soon in people’s garages – driving valuation all have one thing in common: all are things the consumer didn’t drive to the store and pick up themselves. Ironically, Americans are buying less stuff at the store and having more of it delivered. At the same time, they’re increasingly moving to bigger vehicles with more cargo space. SUVs and pickup trucks finally have room for everything, just as consumers no longer need to go out and pick up anything.
This means auto dealers need to invest in understanding at an individualized and personal level how and why their customers will be using their vehicles in order to make the most effective recommendations. (One likely factor: Kids and sports gear. The number of American children who play on a youth sports team is at an all-time high, even as overall youth athletic activity continues to drop).
What: Purchasers of luxury vehicles accounted for two-thirds of the electric vehicle tax credits handed out in 2018, and some auto industry analysts predict that number to reach as high as 75 percent in 2019. However, EV tax credits face an uncertain future in general, with some scheduled to phase out under current law and others potentially ending sooner than planned.
Why: Even as manufacturers invest big in electrification, it’s still largely a luxury good for American car buyers – and ending the EV tax credit wouldn’t help reverse that trend. Brands like Tesla, Audi, Jaguar, BMW and Mercedes won’t be as sensitive as, say, a Chevrolet Bolt or Nissan Leaf to an effective $7,500 price increase. If you’re a dealer in the luxury space, how well are you able to identify potential customers for new EVs? If you’re not, what can you do to help customers who want an EV justify the price premium, and how can you identify the people for whom that sacrifice is worth it?
What: Police in areas where self-driving cars are being tested report a variety of human-on-robot “road rage” incidents, in which vehicles were run off the road, had their tires slashed or were vandalized or threatened.
Why: While there’s a lot to be said for the autonomous vehicle technology of the future, plenty of people are concerned about what it might mean for their communities and for themselves. Others simply prefer human interactions over engaging with automated systems. For dealers, it’s an opportunity to engage with their local community as the human face of their brand’s autonomous future strategy. It’s also a reminder of the importance of human connections when interacting with automotive consumers, even when it’s backed by complex and critical digital technologies. Remember, the root of “personalized” is “person,” and many consumers neither want nor trust automated interactions.
What: After a long stretch of decline, the workforce participation rate – basically, the percentage of the adult population that’s either working or looking for work outside the home – ticked up again as core unemployment remained low. But economists warn the trend of more people dropping out of the workforce to resume for the foreseeable future.
Why: More people going to work every day in the short term means more potential customers. How does your dealership identify people who hadn’t been good candidates before due to lack of income, but might now need a new daily driver. Don’t forget that in the long term, estimates of future vehicle sales figures are often based on predictions of broad population size. But when increasing percentages of that population aren’t working – or aren’t working the kind of formal job that allows them to qualify for traditional automotive financing – how are they going to become your customers? How well do you know what your customers’ plans are for their own future, and what does that mean for their transportation purchasing plans?
If you’re trying to predict the future, then it’s good to have predictive analytics on your side. Our behavior prediction technology helps you stay connected to changing buyer behaviors, changing industry conditions and evolving economies. Contact us today to learn more about how automotiveMastermind can prepare your dealership for the future.