Anything can happen in the future. Especially, ever since the Covid-19 pandemic happened, nothing can be said for sure. However, it’s not totally impossible to predict the future of the auto industry.
After a recent study, done by the Coax Automotive team, a total of six predictions were offered to the automotive industry for the year 2021.
With the first quarter well over, let’s see how much of the predictions came true and what else might come true or not with the passing of the current year.
6 Predictions Made for the Auto Industry before 2021
The research was completed by interviewing 1,196 dealers and 1000 consumers, as we headed into the current year.
So, it’s obvious the said predictions were made in 2020. While the Covid-19 pandemic and lockdowns were still in effect. As they are today for many countries around the world.
Cox Automotive (CA) team thought of gauging the leading trends that will impact auto dealers and consumers in 2021, a year filled with uncertainty.
Under the influence of their recent research, the CA team offered a total of six predictions for this year’s automotive trends.
So, let’s see what they are all about!
- Things Will Never Be the Same in 2021 as Before (Even with a Vaccine)
The study shows that less than 1/3rd of the dealers and consumers believe things will “return to being normal” this year.
How is that? Because only 2% of the consumers thought Covid-19 would get over by the end of 2020.
Sadly, 98% of them were correct in their assumption.
While 31% thought that the pandemic will be over within the current year 2021. 38% assumed it should subside by 2022, 11% of the consumers thought that it might not happen until 2023 or later, and 18% were never sure about what would happen.
Now, according to the study, only 49% of the consumers planned on getting vaccinated for Covid-19. On the other hand, just 7% thought that the vaccine will be of any help in eradicating the virus.
So, a slow 1st quarter of auto sales, in 2021, was rather expected; no matter combustion or electric vehicles. All due to the uncertainty surrounding the Covid-19 pandemic and its effects.
- Auto Industry Will Recover and Become Stronger
In comparison to 2020, the current year is expected to make the automotive field stronger. With the corona prevention vaccine introduced, people have some hope now.
So, the research might have predicted this correctly. Because dealerships and consumers were already hopeful that things will be better in 2021.
As 24% of the consumers and 45% of the dealerships believed that the Automotive market will recover and show betterment in comparison to the previous year.
- Restocking Inventory as Before Will Be Tough
In the interviews, dealers indicated that the inventory will remain tight during 2021. Because only 40% of the franchised and 29% of the independent dealers predicted their dealerships will return to pre-pandemic inventory levels in 2021.
While, again, 40% of the franchised dealers believed the percentage of used vehicles they acquire through digital tools will increase in comparison to in-person visits. Only 33% of the independent dealerships believed the same.
During all this, 34% independent and 23% franchised dealers predicted that low wholesale inventory will still impact their dealerships negatively in 2021.
- Digital Retailing Will Rise Throughout This Year
Moving forward, consumers showed certain expectations from the dealerships in the recent study. As going into the store to pick a vehicle, they will like to shop for them over the internet.
If you want numbers, then 9 out of 10 consumers and dealers believed consumers will shop online much more than physically going to stores for most things in 2021.
While 84% of the franchised dealerships agreed that their patrons expect to complete most of the purchase process online in comparison to past years. Among 80% of which plan to offer an increased number of parts of the vehicle purchase process online in the coming 1 to 2 years.
As 74% of these dealers know their dealerships will not survive the Covid-19 impact if they don’t go ahead with digital retailing.
- Tesla Will See New Competition in the EV Market Slowing its Growth
Generally, people might not consider the possibility that any other existing or new rival can beat its place in the EV market.
However, the CA team’s study shows 54% of the consumers and 63% of the dealers (both franchised and independent) believe a new electric vehicle startup will show up the EV scene and challenger Tesla’s hold and growth in the market.