US Automotive Industry Overview
With the fast pace of change in the automotive space and related technologies, the US automotive industry is expected to witness several risks and challenges over the coming years. However, new technologies such as driverless cars, increasing preference of luxury vehicles by the millennial group and Gen Z customers, and rise of tariff wars will drive future demand. In order to succeed, automakers will need to adapt quickly to the evolving landscape and embrace challenges and opportunities coming their way. In addition, automakers looking to enter a new market must invest in market opportunity analysis to revamp business models by understanding the current and potential market requirements.
The client is a well-known European automotive company looking to expand their business operations to the United States. Although the client had over 7 years of experience in serving customers across the European market, they did not wish to take a chance. Before making the market expansion to the United States, they wanted to conduct a market opportunity analysis. To do so, they approached the experts at Infiniti Research.
Top challenges faced by the company were:
US automotive industry challenge #1: Tariff wars
With the US automotive industry introducing higher taxes on steel and aluminum imports from China and US leaders inflicting taxes on car imports from the European Union, the client wanted to understand all the tariff risks in the US automotive industry. In addition, the client wanted to understand the impact of emerging regulations on the automotive industry in US.
US automotive industry challenge #2: Divergent trends
The US automotive trends, especially digital and technological advancements have put automakers in a state of disruptive transformation. Also, US consumers’ demands for more digitalized experience compels automotive companies to incorporate technological offerings. Hence, before entering the US automotive industry, the client wanted to identify the right scale of opportunities and understand the evolving automotive trends in the market.
US automotive industry challenge #3: Identifying lucrative customer segments
With the millennial group and Gen Z customers becoming the active car buyers in the United States, understanding millennial customers’ needs and requirements are becoming vital for companies operating in the US automotive industry. The client, therefore, wanted to understand the preferences of the millennial group and make changes in their business plans to lure millennial consumers.
US automotive industry challenge #4: Adapting to increasing demand for environmental sound vehicles and technologies
With major automakers in the US automotive industry planning to launch more hybrid and electric vehicles to meet the needs and demands of US consumers, the client realized the need to monitor the business strategies of major automotive companies in the US and revamp their business plans and offerings to meet the ever-increasing demand of consumers.
With over 15 years of experience in serving various automakers across the globe, we helped the client to devise an efficient market expansion plan.
- The initial phase of the engagement involved US market scanning and monitoring. In this phase of the engagement, the experts at Infiniti Research actively monitored the external environment to identify customer needs, forecast competitive action, and identify emerging regulations in the US automotive market. This phase of the engagement helped the client to assess the changes in emerging regulations and understand the tariff risks in the US automotive industry. By understanding the tariff risks and regulatory policies, they were able to prepare themselves for changes pertaining to industry regulations.
- The next phase involved conducting a trend analysis. By leveraging Infiniti’s expertise in offering market trend analysissolution, the experts at Infiniti Research helped the client to gain in-depth insights into the US automotive trends and adapt to the current market requirements. In addition, the experts helped the client to incorporate technological offerings to meet consumers’ demand for digitalized experiences.
- In the third phase of the engagement, the experts conducted a customer segmentation analysis. With the millennial group becoming more important for luxury automakers in the US automotive industry, the experts segmented millennial customers into various groups based on their characteristics such as spending patterns and buying behavior. This helped the client to focus on lucrative customer segments and efficiently utilize their marketing budget.
- The final phase involved conducting competitive intelligence engagement. In this phase, the experts closely monitored the client’s competitors’ plans and actions regarding new launches. This helped them to plan their strategies accordingly.
With the insights obtained from Infiniti’s market opportunity analysis, the client was able to establish themselves in the US automotive industry within two years of entering the market. Also, they were able to capitalize on new market opportunities and outpace the market competition. Furthermore, the company was able to achieve savings of over 3.6 million.