The automotive industry has had its share of ups and downs over the past ten years, but 2016 closed out as one of the best in a decade. Sales were 3% higher than in 2015, with $1.7 million in December alone. However, challenged with surpassing the success of 2016 and faced with the potential impact of the election and long-term lease expirations, the 2017 Auto Industry forecast was rather uncertain going into the New Year.
Media Works examines the top trends for 2017 and offers our insights into what’s driving the industry this year:
Technology is going to be the highlight of the automotive industry in 2017. From driverless vehicles to hands-free connection, technology has been steadily evolving in automotive over recent years. Ford is hoping to have their first driverless car on the road by 2021, while Google’s self-driving car, Waymo, will be road-tested this year using minivans.
As traffic-related deaths rose for the 2nd straight year, car manufacturers have been tasked with using “big data” to create a safer environment for drivers and passengers. Big brands such as Ford and Toyota are coming together to collect and share driver data, hoping to develop more car-friendly apps that will seamlessly and safely integrate into the drivers’ lives. (Think Amazon’s Alexa for vehicles!)
While Technology is king for the general market, tech is also a huge factor with targeting Millennials. Although they made up 28% of total new car sales in 2016, brands are looking to adjust their strategy based on the lifestyle of this audience. Ford is looking to compete with Uber and Lyft by creating a ride share program targeted to Millennials in 8 cities by the end of the year. Chrysler, on the other hand, has built a concept vehicle catered to millennials where multiple occupants can plug in, share music, and have their personal preferences saved for the next time they drive. Toyota is taking this concept a step further, looking to artificial intelligence for a model that can read the mood of the driver and cater to their preferences.
The first two months of the year started off sluggish, with consumers coming off the Holiday season and a heated, uncertain Political season. However, with a steady economy, low gas prices, and tax season approaching, the outlook on automotive sales for 2017 remains positive. General Motors, who celebrated its best sales year since 2006, saw a 3.8% decline in January but a 4.2% increase in February. Nissan has seen a gain in demand for light trucks, crossovers and SUV’s, setting a monthly record gain of 22% in February.
Several months ago, there were huge concerns about when the long-term lease bubble would burst and if it would happen in 2017, but the conversation shifted from used car woes to new car sales gains. The industry is focusing on technology, using data to provide drivers with convenient and safe ways of accessing technology/information, and better ways to reach Millennial drivers. Many forecasters are projecting a 1-5% decrease in sales year over year, however some are saying the new presidential administration will stimulate the overall economy, resulting in another record year for the industry. Whatever the outcome, 2017 is sure to be a ground-breaking and evolutionary year for the automotive industry!
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