Since the coronavirus outbreak really hit the US in March 2020, the automotive industry and COVID-19 have both been in the headlines. The automotive industry has made efforts to show unwavering resilience. That’s something it has successfully done in every major economic crisis.
One year later, the outbreak continues to cause widespread global concern and economic hardship. It affects communities, consumers and businesses. This had a massive impact on automotive sales and services. This was due to consumers practicing social distancing. This slowed automobile purchases and consumers were hesitant to have their vehicles serviced.
To be more customer-centric in these difficult times, automobile dealerships and service repair companies have had to completely change how they do business.
One example is Glass.net. They’re taking the initiative to provide safe auto services to consumers who need glass replacement across the country. They’re encouraging their installer network to follow the CDC and WHO guidelines to prevent spreading the coronavirus.
There are thousands of other local automotive businesses that had to change to protect customers and to survive.
The auto industry and COVID-19: How it affected us
1. Customers prefer purchasing cars online and having them delivered to their homes
Automobile dealers are quickly shifting from traditional transactions to meet consumer preference by digitizing all the steps necessary for purchase. Today, 92% of automobile and truck purchasers are entirely dependent on online research to purchase and deliver vehicles.
Even though car dealerships offered vehicle delivery even before COVID-19, only a few of them could conduct a complete vehicle sale online. Since social restrictions have made a tremendous impact on consumer behavior, formulating digital strategies for online buying and at-home delivery will be completely beneficial.
2. The aftermarket had a very strong 2020
The automotive aftermarket has been traditionally recession-resistant. This was proven again in 2020. Many pundits predicted a significant drop in aftermarket sales due to the pandemic. All indications are that 2020 was a robust year for the aftermarket. In fact, one of the biggest problems faced in the aftermarket were supply chain issues and lack of inventory, not consumer demand.
In 2020, there was also a rise in do-it-yourself (DIY) consumer purchases of aftermarket products, as consumers backed off of do-it-for-me (DIFM) automobile repair and services.
3. Consumers want the auto dealer experience in their home
Even though online research provides dealership experiences, many consumers still long to engage with cars in an open dealership lot. Brands that would like their potential buyers to engage with particular models are considering highlighting video content of interior; test drives, walkarounds, review videos and overviews through:
- Virtual reality (VR) test drives
- Review videos
- At-home test drives
- Digital showrooms
- Video conferences
- Online configurators
4. Auto shoppers are finding comfort in car ownership
Since the outbreak, modes of transportation from flying to ride-sharing are going out of style. Due to this, the automotive industry is witnessing a rise in consumers’ desire to own automobiles. A research analysis conducted by Cars.com confirmed that while the use of private and personal cars has doubled, the reliance on public means of transport is slowing down to a halt.
Use of public transportation and ride sharing crashed in April 2020.
5. Consumers are tuning in to digital events
Due to current social restrictions, automotive trade shows (like the SEMA Show), vehicle launches, and auto shows are cancelled or postponed. Nevertheless, some auto manufacturers shifted to fully online launches for new vehicles. AutoTrader, for example, oversaw its 2020 AutoTrader South African Car of the Year through a custom-made website designed specifically for the event where consumers were able to cast their votes.
Major changes to expect in the automotive industry post-COVID-19
We may see reduced expectations of reliance on shared, driverless cars. These are sometimes called cars with advanced driver-assistance systems or ADAS. We may see that with rental cars, too. Today, the average user is unlikely to use a car that other people have used unless they have assurance of the vehicle’s disinfection.
We’ll see continued increases in purchases of electric vehicles (EVs): Disruptive events often bring about changes in every sector. Although the widespread use of battery electric (BEV) and hybrid (HEV) cars is yet to reach its full potential, the USA is witnessing a 29% to 41% increased interest in these automotive technologies.
Since consumers are openly sharing their willingness to purchase a PHEV or BEV, the demand for electric cars is growing.
We’ll continue to see contactless automotive sales: For potential automobile buyers, visiting a car showroom, getting in a display vehicle, and touching plausibly contaminated surfaces are all activities that raise concerns. Despite the recent CDC announcement showing the primary way to contract the virus is from airborne droplets, the public will likely hesitate to come in contact with potentially contaminated surfaces.
Since automakers and auto dealerships have increased demand for contactless sales, they’re continuing to offer online ordering and walkarounds to demonstrate features. We’re also likely to continue to see home delivery for test drives to pave the way for a productive future in the automotive industry.
To wrap up
A full recovery for the automotive industry will take some time. There isn’t an accurate prediction of what the future holds for the automotive industry. But, technology and digitization will certainly play a significant role in purchasing automobiles and trucks.