Three Transformative Trends in the Automotive Industry
When it comes to looking at industries in detail, few are as influential as those in the automotive sector. The automotive market is one of the largest globally, and plays a huge part in the countless industries it supports and nourishes, from courier services to part manufacturers. The supply chain includes so many different facets, from engine manufacturers, semiconductor suppliers, and everything from tyres, lights, mirrors – the list is endless. The reach of the automotive industry is vast.
Despite the influence the industry has, it has remained stable throughout the past ten years or so. Manufacture, production and distribution have been level and predictable, which has meant many things including security and confidence in the industry. The stability the sector has had, however, is changing.
This could be due to a number of contributing factors. The global pandemic certainly played a part, with the drop off in automotive production, followed by a recovery surge which businesses had not predicted. New challenges have presented themselves, and while more established businesses struggled to adapt at speed, smaller start-ups took their place in a market desperate for answers to these new issues. Technological and environmental innovation has also increased in availability, popularity and affordability, which have also forced all automotive players to evolve.
With the rapidity of changes, it can be hard to foresee what comes next. We have put together a list bringing together three of the most important trends that are likely to affect the automotive industry over the next few years.
#1. Electric vehicle adoption
Arguably the most important trend likely to hit the automotive industry is the worldwide shift toward the use of electric vehicles. This is expected to be a slightly slower growth over the longer term: online searches for electric vehicles (EVs) have increased 257% in the last five years. The International Energy Agency estimates that EV sales make up more than 4% of all vehicle sales, with China and Europe leading the way. By 2025, 10% of all vehicles are expected to be EVs, and 58% by 2040.
Many manufacturers who are moving into the EV space are having to break new ground in a more sustainable space than they are used to. New manufacturing processes and, potentially, an entire new supply chain are changes that need to be understood and adapted to. Everything will need to be considered, from engaging fresh suppliers they can trust, to new logistics partners who can be relied upon.
This shift into EVs is a critical time for the automotive industry, so the elements that make up their supply chain must be trustworthy and reputable, as failing at this first hurdle could result in a damaged reputation on the EV scene. Reliable suppliers, partners and logistics providers, and forging good relationships with them. will be necessary to secure the business’ future as a main player going forward.
#2. Autonomous vehicles
One trend set to disrupt the automotive industry is the rise in autonomous driving. Although currently in its infancy, with an estimated 1,400 self-driving cars on the road, autonomous vehicles are expected to be up to 33 million by 2040. The global market for autonomous vehicles is valued at US$54 billion, which is also expected to increase by ten times in the next five years.
One reason for this expected boom is the fact that many well-known automotive manufacturers are already invested in the autonomous vehicle business, with more likely to get on board as the technology evolves.
Even more so than EVs, the move into autonomous, self-driving cars will mean new technology and even more new suppliers. This addition of elements to the supply chain poses its own challenges. All automotive parts are valuable, and when it comes to autonomous vehicle parts such as brake elements, speed sensors, universal joints and cooling rings, this is even more so the case. Choosing suppliers and technology providers is a critical aspect, for obvious reasons. In the same way, partnering with the right logistics provider to deliver the valuable and potentially fragile parts this trend requires is vital.
#3. Connected cars
‘Connected cars’ or vehicle connectivity is a trend that has come about as a result of the increased availability and reliability of 5G. 5G infrastructure is on the rise, and automotive manufacturers are doing their best to keep pace.
This technological advancement should allow drivers to stay connected at all times. With the top-tier tech companies all vying to offer the best connection technology, the trend of connectivity within the automotive industry is likely to take off quickly. These rapid advancements have meant automotive manufacturers are sourcing hardware that has never been used before in this space. The vehicle connectivity element of the automotive sector will continue to change and improve as technology evolves. This trend, therefore, calls for a more fluid supply chain that can adapt as required. In conjunction, a reliable logistics partner needs to be selected. It will be key for all automotive companies who wish to remain current in the 21st-Century market that they, together with their suppliers and delivery partners, work to ensure a constantly improving system.
These three trends are causing a major ‘shake up’ of the automotive industry, and will continue to do so in the future. As automotive manufacturing businesses adapt to keep up with the rapid advances in environmental concerns and technological innovation, so too must their partners. These trends impact every facet of the automotive sector, most notably logistic providers and ever-changing supply chains as they grapple with a more complex journey from A to B. Choosing the right Time Critical delivery partner is more important than ever.
Royale International is a prime example of an ideal logistic partner for businesses working in the automotive space. With over 25 years’ experience, Royale International is able to adapt and evolve within an ever-changing industry. The global pandemic has also helped us to understand the difficulties that broken supply chains can bring, and how to navigate around difficult situations and unforeseen changes. With a series of account managers from a number of industrial spaces, including both the automotive and technology sectors, they are perfectly placed to help your business navigate these trends. With a global distribution network, Royale international is an ideal Time Critical logistics company to partner with for all your logistic needs.
Find out more here: https://www.royaleinternational.com/services/time-critical-services/