The onslaught of Covid-19 noticed automakers undergo a troublesome first half of 2020, barely lifted by a extra buoyant Q3. World shutdowns halted manufacturing and provide chains have been disrupted. Sadly, a troublesome 2020 has bled right into a challenged, but opportunistic 2021. And in a merciless twist of déjà vu, many markets—specifically the UK and EU—are again in extended intervals of lockdowns which can probably see Q1 auto gross sales compromised. Even with the extreme cost-cutting throughout OEMs seen final yr, and regardless of an encouraging roll-out of the vaccine within the UK, Covid-related dangers stay worryingly excessive and the auto business is unlikely to see a rebound this yr, and even subsequent few years, again to pre-pandemic gross sales numbers.
Nations like China which have bounced again from the virus faster than their Western neighbours will see the pendulum of provide versus demand swing again in favour of the East the place automakers with larger shares within the Chinese language market will revenue from the area’s comparatively quick restoration and progress.
Nonetheless, regardless of the gloom, the auto business is way from stagnant. The subsequent decade might be certainly one of its largest but. 2020 gave automakers the chance to reposition themselves as they emerge from the disaster on a brand new path in direction of electrification and connectivity.
Exhausting international CO2 emission targets are in play, and automakers should double down in the event that they need to be in with an opportunity of getting even near reaching them. Subsequently, 2021 would be the yr electrical automobiles (EVs) take centre stage. They’ll be pushed out into market, even perhaps with a reduction, to drive gross sales and additional contribute to lowering emissions.
2021 will see a continuation of tendencies which were effervescent even earlier than COVID. From ramping up EV funding to digital enjoying an ever-increasing function within the car buy journey, sustainability and buyer expertise would be the standout priorities for automakers this yr.
The electrical revolution
With lofty international zero emissions targets, will probably be the last decade of the EV, and 2021 is a crucial yr in that step change. We are going to see each main OEM start or enhance advertising EVs throughout their car line-up, with many scaling and recalibrating their enterprise fashions to promote EVs at scale. Each new and outdated automakers will launch much-awaited automobiles in 2021. There are various from sport vehicles to SUVs: Audi e-Tron GT, BMW iX3, Mustang Mach-E, GMC Hummer EV SUT, Lucid Air, Polestar 2 (Volvo), Nissan Ariya, and Mercedes-Benz EQC to call just a few. While it’s unlikely this fast roll-out will trigger Tesla’s crown to slide, extra competitively priced EVs available in the market will probably have a knock-on impact within the years to return.
As for the EV start-up market, focus might be on supply vans and buses which can show revolutionary if achieved at scale. For instance, firms just like the UK’s Arrival, backed by Hyundai and BlackRock, will proceed to construct quantity orders within the EV B2B house. Final yr noticed Amazon reveal its first electrical van, developed by EV start-up Rivian, which claims to “increase the bar for next-generation supply” automobiles. While roll-out isn’t largely anticipated till 2022—the supply big goals to have 10,000 automobiles on the highway by subsequent yr and ten instances that by 2030—its mere promise will see vital motion on this house over the course of the following yr. As we begin 2021, Rivian is near elevating funds with a US$25bn valuation.
Digital expertise
As client shopping for behaviour continues to shift, and COVID-related restrictions stay at the least for the primary half of 2021, improved buyer expertise will grow to be completely crucial in 2021. Subsequently, additional funding might be made in digital. On-line gross sales instruments will enhance and grow to be embedded within the course of, and though the fashions behind them received’t change fairly but, they are going to start to evolve and establish gaps within the present buyer expertise. Digital leaders like Daimler supply single sign-on to streamline the client expertise for each present and potential clients. A lot of the automakers are specializing in accelerating their connectivity and voice-activated capabilities to enhance the in-car, purchasing and repair expertise. To do that, not solely are they implementing the expertise, however they’re additionally constructing knowledge platforms to activate on the info and have the ability to make sooner and smarter choices on the right way to elevate and evolve the client expertise.
Self-driving and autonomous automobiles
While not a serious space of focus for automakers in 2021 as they prioritise efforts to new and upcoming laws on emissions, creating and advertising climate-friendly merchandise, and recouping their losses, self-driving and autonomous automobiles will probably proceed to be a scorching matter of dialog, and nonetheless make for the occasional headline.
Self-driving and autonomous automobiles might be a test-and-learn endeavour however is not going to be the place all, and even most, of 2021 budgets go. The fast want within the financial system and post-pandemic for the creation of jobs and strong money circulate would require a give attention to what OEMs can convey to fruition at scale within the subsequent 18 months. EVs are that chance.
Within the interim, will probably be the large tech giants—Google, Apple and Microsoft—that proceed to work on autonomous automobiles and accomplice with automakers to convey these to a actuality within the close to(ish) future. Tesla may even lead the cost given it already has an EV platform to gas the enterprise. As autonomous automobiles received’t be a actuality for some time, we’ll see goal geographies the place these expertise gamers, Tesla and the OEMs will proceed to evolve the expertise, focusing on roll out within the subsequent few years. However 2021 might be a yr extra of chatter than market realisation.
Moreover, firms like Uber and Lyft have enterprise fashions that in the end depend on autonomous, so we might even see them construct momentum this yr, however will probably be cautionary till the expertise and guidelines of the highway work with the wants of autonomous automobiles.
We’ll additionally probably see new designs for autonomous automobiles, at the least at CES, that take the body of what we all know as how vehicles look in and out, and place focus extra on the expertise itself. In 2021, desires of what it could possibly be wish to be in an autonomous car might be refined and start to construct a actuality for shoppers, realised by expertise.
Connectivity
A giant focus for automakers this yr, along with constructing an EV platform, might be related automobiles and the way they will present a extra strong and 2021-like expertise for shoppers who’re more and more demanding of such. Latest analysis reveals that expectations for automobiles pre-fitted with related tech is now mainstream, with virtually all folks surveyed (93%) needing at the least one related function of their subsequent car, cameras and navigation popping out prime. The look-and-feel of the automotive and the way it improves and engages with shoppers’ digital lives is what’s going to create probably the most model loyal clients.
Streamlining
Sadly, the method of streamlining companies is likely removed from over for automakers. With a troublesome yr behind them, and maybe additionally a troublesome yr forward, they urgently have to lower the complexity of their enterprise and enhance profitability; lowering the numbers of derivatives which aren’t worthwhile, minimising their ‘nice-to-have’ tasks and growing the pace of change to make a distinction. The choice outlook is unfavourable.
In the end, 2021 might be a yr of meticulous focus: give attention to constructing the way forward for the auto business, with EVs and connectivity being the first areas for progress and transformation together with focusing on working method and prices.
Concerning the writer: Alyssa Altman is World Transportation & Mobility Lead at Publicis Sapient
