The automotive industry is one of the key adopters of advanced technologies, resulting in rapid innovations and disruptions in this sector. , the future looks bright for automobile companies. Especially with the recent technological advancements, the industry is grooming itself to take customer experience to the next level. But on the flip side, the journey to success will not be a bed of roses for companies in the automotive industry. The consumers are changing and evolving from an ownership-centric mindset to service-centric demand. This demands businesses to keep track of the changing demands of their market continually. Keeping tabs on the consumer’s demands coupled with the dynamic market trends could prove to be a daunting task for automotive companies. But this is only one of the challenges that companies in this sector need to be aware of. Here’s a list of the top automotive industry challenges to watch out for in 2018 :
Rise in globalization
The increasing rate of globalization is undoubtedly good news for the growth of the automotive industry. However, expanding operations at a global level could be a challenging task for companies. Drastic shifts in global sources of supply, combined with strategies to take advantage of emerging markets, gives rise to new challenges related to global trade and international finished vehicle logistics fulfillment. Which means the players in this sector have to ensure that their knowledge about foreign markets, supply chain, and other operational strategies have to be impeccable in order to survive in a global scenario.
Innovation is the need of the hour
The automotive industry is one of the biggest sectors in the world, which means there is no shortage of competition in this industry. Also, the growing inclination of customers towards the latest technologies and customization is forcing players in the industry to update themselves and efficiently cater to customers’ needs. In this situation, it becomes highly challenging for automakers to find new ways to get closer to meeting customer demands while simultaneously maintaining their profitability to gain an edge over other players in the industry.
One the most pressing hurdle for the automotive industry is the need to meet rising restrictive emissions and fuel-consumption regulations in the Western world. It’s easy enough for automakers to build a single car model that meets these requirements. However, in the U.S. the problem is that an automaker’s entire model lineup, including SUVs and light trucks, have to maintain an average level of higher mpg and lower emissions. Automobile companies are expected to improve fuel efficiency by at least 20% and as much as 60% by 2025, depending on the company and regulations.
Players in the automotive industry have recognized that most of their customers are attracted to the rapidly progressive intelligence and connectivity in vehicles. But designing and producing these smart cars and trucks is no easy task, and it poses real risks. Additionally, the cost of incorporating and managing new technologies and data is skyrocketing. This poses a major challenge for automotive companies when it comes to integrating new technologies cost-effectively.