We wrote this article back towards the end of 2016. Since then, it has been two eventful years for the North American auto industry. Many things have happened and thus have caused a shift in the automotive market.
So we’ve decided to compare the list of trends that were shifting the industry in 2017 with some of the most important trends in 2018 and 2019. Enjoy the reading!
- The increase of auto market competition. The growth in car sales observed in 2016 was due to the high competition and tough fight of different brands, strategies, policies, marketing tools, advanced technologies and even bonuses and discounts. 2017 will surely add some salt to this fight as not the cars but new technologies and marketing techniques run the automotive business today.
- More businesses for sale. Many car business founders of the older generation are entering retirement. They are gradually replaced with young, energetic, full of life and crazy ideas generation of millennials. So in the nearest future we should expect the boom in dealership sales and name changes. Besides, the peak of the car business selling is going to start in 2017 before the market competition goes up and business purchases fall down.
- Welcome millennials. Today’s business staff is getting young. 20-year old managers are smarter, faster, friendlier, more active, creative, professional, communicative, experienced and interesting than just 10-15 years ago. They wheel hi-techs, set the rhythm of modern business lines and behavior. Older specialists can’t compete with millennials. In 2017 they will be welcomed in auto business as a progressive job force.
- More remote employees. This trend is gaining force worldwide. An employee’s physical presence in the office is not the main factor of a productive work. As calls, meetings, conferences and presentations are now available in video format by Skype, Viber and other messengers lots of positions require just a computer, Internet connection and time. Dealerships are usually careful with such remote employees, but perhaps 2017 is the right year to promote and develop the trend of high demand.
- Talent-opening policy. Some years ago companies hired employees to do a particular work and to perfect it. Now companies are trying to develop their staff’s natural talents and invest in their strong sides. The statistics shows that the work efficiency increases 21% if people love what they do. In 2017 the focus will fall on strength-oriented trainings and talent-opening programs.
- Car dealer software is in high demand. Millennials dominate almost every market segment, forcing retailers to bow to their demands. Moreover, the Millennial’s shopping habits have influenced the automotive industry as well, prompting dealers to adapt. Many automotive shoppers want to use software to search for, buy, and diagnose their vehicles. Google can actually vouch for that statement. U.S. car dealers actively implement software for marketing, sales, service, and walkaround video inspections to name a few, in order to automate and streamline redundant tasks and to provide a better overall customer experience.
- Carpooling & ride-sharing on the rise. Many young adults who live in metropolitan cities would prefer to hail an Uber or Lyft rather than driving a car. The bulk of that growth has come from cities and large towns, so metropolitan dealers definitely shouldn’t ignore this trend. One of the ways for dealers to profit from such a shift is to develop relationships with Uber and Lyft drivers. For example, try creating special offers for vehicle maintenance, or promotions for drivers who want to upgrade their vehicles to qualify for UberLUX.
Automotive Sales Trends
- Sales boom. 2016 showed that the demand for cars was increasing in record volumes compared to 2015. For example, according to LMC Automotive consulting company about 8 million new passenger cars and LCVs were sold only in June 2016 worldwide. That was 5.5% more than in June 2015. And within the first six months of 2016 about 46 million vehicles were sold globally which made 3.6% more than within the same period in 2015. This increase in sales will go on in 2017.
- Connecting customers. The market is overcrowded with annoying ads, products and services which chase, follow-up and irritate customers making them hide and search for other ways of shopping. This strategy was found wrong. Now companies are trying to connect people to what they want and need. In 2017 we will see more businesses, software tools and new professionals focusing on client + product connectivity.
- Personal brand. Today people want to buy from people, not from brands and trademarks, but from ordinary people who know and use what they sell. So it’s highly essential to develop a personal brand inside your dealership. Dealers should be more flexible now and communicate with customers on behalf of a person or people who work there, but not on behalf of their brands. In 2017 the need for personal branding will get more obvious and evident than before.
- A decrease in sales. Many U.S. auto dealerships have been reporting a noticeable drop in retail sales and customer traffic in their showrooms. The two main reasons are first, the surge of 2 to 3-year old leased vehicles entering the used car market, and secondly, higher auto loan interest rates. However, people are still buying vehicles. The difference is, they are doing it more selectively. It takes them more time to decide on the year, make, and model of the vehicle, as well as what dealership they will end up buying it from. If you want them to choose your showroom, you need to provide a service that your competition isn’t able to provide. For an example of this, look at paragraph 1 above.
- Growing price. In the near future the rise in prices for cars will continue. As today’s demand on vehicles is high the prices will go up. Dealers will only win from such increases. The latest statistics shows the growing demand on the luxury used cars. If some years ago drivers preferred 5-6 year-old models, today the 2-3 year-old cars enjoy their popularity in real deals. The prices for such vehicles grow fast. Now a buyer is required to pay around $18 000 for a 3-year-old car and the price is growing. This tendency is going to develop in 2017.
- Products become green. Modern generations get more responsible and aware of the current environmental problems. As the society realizes the importance of eco things the demand on green and transparent products and goods arises. Auto industry also strives for green technologies and results. Electro cars, hi-tech filters, safe vehicles, digital programs, etc. – huge efforts are made to provide eco-friendliness to the harmful manufacture. Auto dealers should pay attention to eco vehicles, include them into their inventory and promote. Such cars will make trend in 2017.
- SUVs. SUVs conquered the world’s auto market due to their design, comfort, practicability, functionality, usability and a unique combination of a car, minivan, and sports vehicle. Today SUV is a trend in car production and selling. The total volume of SUV sales achieved almost 2.3 million in 2016 in the US which puts it to the top of the sales statistics. This number will go up in 2017.
- The future of the car design. When a customer comes to the dealership to make a deal on the car purchase what factors influence his/her choice? Car safety ratings? Or the crash test results? Or maybe fuel consumption? Of course, all these factors are decisive, but the most affecting one is the car design. Design stimulates the sales but at the same time can be the reason of customers’ regrets and disappointments. Car producers have taken it into account and directed all their strengths to the vehicle form enhancement. So the purpose of the car design in 2017 will be to create a sense of comfort, coziness, home and safety as well as to provide the ease of use for all car functions.
- Electric vehicles. The rise of electrification has continued throughout 2018. Electric vehicle sales grew by 30%. Multiple electric vehicle charging stations are being installed throughout the US. Many major automakers such as Volkswagen, Audi, Renault-Nissan, BMW, Porsche, and others are spending millions of dollars into designing electric cars and plug-in hybrids. While the mass-market demand for electric vehicles remains uncertain, we can unequivocally say that this trend is here to stay.
- Farewell to Ford sedans. Ford made our jaws drop with that April 2018 announcement. They said that the company will eventually discontinue all of their passenger cars sold in North America, except for the Mustang and Focus hatchback. Therefore, we can see that Ford’s focus (no pun intended) has now shifted to SUVs, crossovers and pickup trucks.
Online Business Trends
- Aggressive PPC. Pay-Per-Click marketing is the main tool in today’s Internet business. PPC trends become more and more aggressive in the struggle for online presence. Now the main focus is put on the work with audiences and the ability to show the ads to particular user groups. The measurability of media and video advertising is a new trend which is proactively developing advertising methods and techniques to measure the efficiency of media ads. Automatic strategies provide the ways that allow you to fight for conversion. The 2017 is going to improve these trends and provide a good ground for their usage.
- Content Marketing, Local and Mobile SEO. At present SEO is often called content marketing which clearly shows the further development of this trend. Content marketing as well as seeding will be the most relevant way of link building. It will help to get quality links from resources and trust accounts of social networks. In terms of link capture so called outreaching trend will be actively functioning. It will work with opinion leaders and will get links through them. Besides, auto market should expect the search optimization on different content categories, such as vehicle model, make, year, etc. There will be more vivid separation between mobile and desktop versions which will result in a clear Local SEO and top local listings. The 2017 will continue the fight against bad quality links and will focus on Mobile, AMP, PWA and Mobile First Index.
- Video in SMM. Today Social Media Marketing is at the peak of its activity and popularity. SMM trends moved beyond the usual social networking to real life and defined people’s life styles, behavior and personal images. Video trend got a higher organic coverage, and its advertising opportunities extended. Video Autoplay feature caused a total excitement at first, but then brought dissatisfaction. Live video streams animated RSS-feed events and determined the trend which can now replace usual webinar formats. In 2017 auto dealers should actively use video possibilities, make video streams of their vehicles and post them to the Internet. This strategy will make success by any measure.
- E-commerce. 2017 is promising to be more productive, efficient and client-capturing for E-commerce than the previous years. Market players will support the growth in sales turnover and will be focused on improving the overall customer service quality. There will be increase in the share of purchases made via mobile devices, the development of the regional logistics and the growth of the marketplace popularity. The main incentives auto dealers should expect from E-commerce in 2017 will be the rise of non-cash payments and mobile payments, the increase of credit deals as well as the development of Apple Pay market, Samsung Pay, and Android Pay.
- Security. Google continues its safety Internet policy and encourages everyone to move websites to the protected https version. It means the struggle against hacking and all fraud types as well as the care about Internet users’ safety first and foremost. In 2017 the new Chrome version will report and indicate the http websites as potentially dangerous. So dealers should move their websites to the secure protocol and update all the links to https mark.
- Mobile Speed is crucial. Google marked 2018 with a few major updates. In July they officially confirmed that page speed is a ranking signal for mobile searches. In the middle of November, they said that a website’s ranking will be determined in accordance with the website’s mobile version performance. This update has endangered all of the unoptimized car dealer websites. Many dealerships noticed a significant drop in their rankings. What will happen next? We don’t know for sure, but it will definitely involve mobile friendliness.
- Google My Business signals make a huge difference. Google My Business is a free business listing platform that lets you manage online information about your dealership as it appears in Google Search and Google Maps. Aside from being a great tool for your local optimization and online visibility, GMB now contributes to your rankings. In 2018 Google My Business signals made up 32% of the top ranking factors for Google’s local pack.
So now you have two lists to compare. It would be a mistake to think that there won’t be any more changes. Within the last five years, the automotive industry has been transformed more than in the first 100 years of its existence. And these trends are here to stay for some time. As a car dealer, you can adapt and profit, or resist change and fall behind. It’s really up to you.
We know that everyone loves to make progress, but nobody really likes change. Here at Autoxloo we help dealers to adapt to necessary changes painlessly. Contact us today in order to see it for yourself.