Significant changes are going on under the calm surface of the automobile industry. The calm is deceiving. The automobile industry is undergoing major changes to the appearance of our cars, to products used for propulsion, to the ever widening use of electronics in our vehicles and, last but not least, the way cars are being sold to the consumer with bench warrants.
These trends in the automobile industry are not all new. Many of them have been underway for years. They happened and are still happening mainly unnoticed by the public and by some industry forces as well.
Several factors are driving the trends in the automobile industry, such as:
• Regulations affecting gas consumption
• Regulations to reduce harmful emissions
• Increased use of electronics in the operation and control of cars
• Increasing consumer demand for more and better entertainment features by consumers
• Consumers changing buying behavior.
On first sight, it would appear that mandatory compliance with stricter pollution control and gas consumption standards in the United States and in other countries worldwide spurns the most significant changes. But that is not necessarily so. True, new and stricter regulations for automobiles make cars more expensive to produce. Stricter requirements for combustion engines most often mean costlier production methods.
However, some of the other trends affecting the car industry have much more severe and long-lasting implications for car manufacturers than regulatory requirements.
Changing consumer behavior
One of the most important among these is the change in consumer demands. As the driver of a car, you certainly noticed that more and more cars, it is difficult to differentiate a Mercedes from a Lexus in traffic or from afar. With the differentiation between cars waning, consumers are increasingly shedding their preferences for cars from their favorite manufacturer. Just like looking for the best deals, they use purchase price, repair statistics and electronic equipment to determine which make and model to purchase. Buyer loyalty is on its way out when it comes to automobiles.
These days makes of cars meet very high-quality standards of manufacture. Domestic cars caught up with foreign makes, even exceeding them.
Electronic equipment in automobiles, especially modern entertainment, and Internet connectivity, is the other major factor in the ever-changing trends in the automobile industry. Car buyers of today expect their new car to have the latest and best electronic equipment standard without having to pay an exorbitant extra price.
Car manufacturers must meet this ever changing consumer behavior to stay in business for the long run.