MAINTAINING 24/7 CONNECTIVITY IS NOW AN EXPECTED FUNCTION OF AN AUTOMOBILE.
With auto sales rebounding strongly last year and holding up well in 2013, we might be forgiven for thinking it’s back to business as usual, now that we’ve weathered the Great Recession and all its attendant disruptions.
But if that’s what we’re thinking we’re wrong.
Two separate presentations to the automotive media at the recent 2013 New York International Auto Show drove that point home loud and clear. While the Great Recession has fundamentally reshaped the auto industry over the past few years, the real game changer may come from a new post-recession consumer mindset, demographic shifts and how automakers respond to them, according to Jim Farley, Ford’s executive vice-president of global marketing, sales and service as well as Lincoln.
And technology — both inside and outside the vehicle — will play a major role in that transition.
“Just as everyone is breathing a huge sigh of relief about getting back to something resembling normal sales levels, the real news is that the Great Recession has dealt a fundamental change to the consumer’s mindset,” said Farley, who delivered the keynote address to the media at the New York Show.
“The question of whether consumers are returning to the market is settled,” he said. “Now the question is, ‘What do they want and expect from us, and are we really ready to respond to what has just taken place?”
MAJOR SHIFT
The recession has profoundly influenced how consumers weigh purchase decisions and what they value in automobiles, Farley explained. Key post-recession trends that will drive industry change include shifting expectations around luxury, the rise of women and Hispanics (in the U.S.), plus a renewed focus on fuel economy, and the rapid proliferation of mobile platforms.
In terms of luxury, it is no longer defined by price, size and exclusivity, he suggested.
“Now, people are… looking for luxury-level quality, performance and features in smaller sizes and at more reasonable price levels.”
As for demographics, while baby boomers will continue to wield the greatest influence on the market for years to come, shifts among women, Hispanics and particularly millennials are reshaping the entire consumer market.
Millennials represent a significant opportunity, as they will start entering the family stage in record numbers during the next several years, he predicted.
But it’s the power of mobile devices that is most rapidly reshaping every part of the automotive landscape — from marketing and shopping to the in-vehicle experience. “We need to learn to think the way our customers already do,” Farley said. “They come first, they are in control.”
Mobile technology is a power enabler for them, putting them in control of the shopping process and changing their expectations around connectivity.
Doug Frisbie, head of automotive vertical marketing at Facebook observed that in the early days of the auto industry, “cars were a step change in giving society the ability to stay connected and engaged with the people they cared about. The opportunity at hand today is not about phones or social software in cars but about remembering that no matter the device, it’s the ability to connect that matters.”
GREATER INTEGRATION
Brendon Kraham, Google’s director of global mobile sales and product strategy, joined the discussion to add that the in-car mobile experience will soon be integrated into all the devices that connect a consumer’s life.
“Automobiles will soon become a seamless part of the consumer mobile experience,” he said. “When your (instrument panel) becomes a
seamlessly connected screen, it truly becomes a more important, integrated part of your life.”
Like it or not, maintaining 24/7 connectivity is now an expected function of an automobile.
That reality was reinforced the following morning by Dr. Reiner Mathes, president of Prime Research, a global organization specializing in strategic communication research. As part of the World Car Awards program, Prime conducts semi-annual Trend Studies, combining data from surveying a community of global automotive experts with that from published articles and online content, worldwide, to identify current trends.
According to Prime’s latest Global Automotive Trends Study, the top automotive trend in 2013 is… connectivity!
“The ‘Digital Car’ is already a reality,” Mathes said. “Silicon Valley already has a strong imrint on today’s cars. Hundreds of software programs are necessary to communicate and to connect, to navigate and to assist the driver.”
In-car connectivity is not only especially important for young buyers, he observed, but also for advanced safety systems such as, Brake Assistance, Pre-Safe or pre-crash systems, intelligent lighting and many more. And, perhaps scarily, we’re just in the infant phase of that paradigm shift.
