What’s in store for 2019?

2019 has the potential to be a landmark year for the automotive sector, to include manufacturing as well as retail. We can expect to see more change …

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One thing is for certain, 2019 has the potential to be a landmark year for the automotive sector, to include manufacturing as well as retail. The ongoing uncertainty surrounding the ramifications of Brexit has weighed heavily on the industry, which was reflected in the new car statistics for 2018.

Figures from the Society of Motor Manufacturers and Traders show that a total of 2.36 million cars were registered last year, which was a year-on-year decline of almost 7% and 12% below the peak achieved in 2016. Whilst sales of petrol-fuelled vehicles actually increased by 8% and electric and hybrid registrations grew by 20%, diesel took a pounding with sales plummeting by almost 30%, as negative sentiment about the fuel continued.

Similarly, the introduction of the Worldwide Harmonised Light Vehicle Test Procedure on September 1st 2018 also played a major part in stifling registrations, as many manufacturers struggled to re-homologate models to meet the new ‘real world’ fuel economy legislation. Indeed, it’s expected that new car stock shortages caused by WLTP will continue well into 2019, proving a headache for retailers, now under pressure to search for late plate used stock in order to fill their forecourts.

Achieving incremental business on every new car will be a key factor in profitability for 2019.

Broadly speaking, the automotive sector can expect to see more change from two distinct perspectives, those that are market-driven and also technological developments.

Over the past five years, consumers have embraced the PCP (Personal Contract Purchase) method of buying a new car to the extent that most new cars are bought this way. That model is now under threat from disruptors who believe that demand from consumers is shifting towards car usership rather than ownership. Subscription plans have become the norm for many products as they enable access to the latest technology without significant upfront expenditure. By bolting together a complete “on demand” package which includes servicing, breakdown cover and insurance, consumers are offered a convenient proposition without having to shop around for each element. This has been taken a step further by Finnish company MaaS Global, which launched the first “Mobility as a Service” app called “Whim”. It finds users the best way to get around using information gathered from all travel services and allows them to pay as they go or purchase a monthly subscription package. The app launched in Birmingham in April 2018 with a roll-out in more cities expected this year.

The rise of car sharing is set to continue through 2019, as the popularity and convenience of low-cost ride-sharing services increases. By 2030 it is expected that 1 in 10 cars purchased will be a shared vehicle. The launch of car-sharing app “Turo”, for example, allows people to earn money by lending their vehicles to others. This followed research suggesting that 40% of car owners claim to have gone for more than 2 weeks without using their cars. Similarly, apps such as “Justpark” enable users to rent out their empty parking space or driveway to help cover the cost of their mobility needs.

From a technological standpoint, further implementation of smart vehicle technology will occur, including both vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I). One prominent V2I pilot to come on stream this spring is a connected corridor for the A2/M2 in Kent. Wireless technology installed along a 12-mile stretch of road will allow WI-FI enabled vehicles to connect with overhead displays, speed monitoring and lighting, in a bid to ease congestion as well as reduce collisions. How this exchange of data is owned, stored and used, however, poses significant questions for carmakers and Government.

Already in our homes and smartphones, the use of Artificial Intelligence (AI) based virtual personal assistants will also feature increasingly in cars, as an extension of the infotainment system. Featuring voice activation to minimise driver input, it’s likely that in-car systems will have many of the features of a smart phone and more besides.

Increased electrification is definitely on the cards for 2019 and beyond. The popularity of alternate-fuelled vehicles (AFVs) is expected to continue in 2019, as more charging infrastructure rolls out. With major manufacturers such as VW declaring that it will start phasing out internal combustion engines from 2026, manufacturers are looking at how the rise in electrification will impact on its dealer network.

As dealers adapt in readiness for such challenges this year, it’s reassuring that their partners, such as Autoglym, continue to evolve as well. Our market-leading vehicle protection system (VPS), LifeShine, leads the way when it comes to paint protection and has proven to deliver profitable VPS solutions for dealers across the UK. Achieving incremental business on every new car will be a key factor in profitability for 2019. Autoglym’s LifeShine has proven itself to deliver this through a compelling business proposition from the UK’s most highly regarded car care brand. Call 01462 677766 or email lifeshine@autoglym.com to find out how it can work for your dealership.

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