3 Biggest Challenges for Auto Industry!

featured image
12 Oct 2015
By admin

The advent of technology has made significant changes in vehicles from last 10 years!

The independent observer of auto-industry have highlighted three powerful factors or forces, which will have tremendous effects on the auto world, these forces can be a risk or opportunity for automobile industry simultaneously. These forces include!
Shifts in consumer demand
Expanded regulatory requirements
Instant availability of data and information


Shifts in consumer demand


The advent of technology has reshaped the consumer’s decision-making pattern. The consumers are now looking for more sophisticated cars at low prices, consumers take high-end features as an essential such as infotainment. The Japanese Original Equipment Manufacturer OEMs, is catching up with the growing trend and introducing cars equipped with the innovative technology and systems.


The critics say, the consumer’s love for a particular brand will change to the technologically sophisticated vehicles. Because people are looking for more convenience instead of brand association. These transitions will transform the automobile industry over the period of the next 15 years. The automobile manufacturer needs to bring sophisticated engine technologies to capture this demand trend.


Expanded Regulatory requirements


Corporate Average Fuel Economy (CAFE) regulations are expanding and getting tougher in the United States and the rest of the world. Apart from the fuel efficiency and emissions regulations, the safety and security features are becoming as a standard such as backup cameras etc.

The automotive industry observer says these expanded regulatory requirements mean extra cost for automobile manufacturers. The companies need to come up with innovative solutions to deal with the challenge of increasing costs.


Availability of Data and Information


The information flow has increased ever since the internet has born, and data are readily available about vehicle usage across the world. Now companies have the pool of data about the drivers’ preferences and behaviour, similarly consumers also have instant access to real-time data about the car models, their usages, features and specifications. But according the auto industry critics, the automobile brands are facing big challenges to use that excessive data and information to create value for consumers across the globe.

The real cost of electronics and software contents has increased to 35 percent, whereas only a decade ago it was below 20 percent. The electronic innovation contributes to more than 90% of new features in automobiles.


The Telematics feature is another challenge for automobile manufacturers, these features include parking assistance, lane-keeping assistance, car maintenance and usage reporting, all the exclusive feature comes with a huge cost to manufacture but provide a great driving experience to the consumers.
All the above forces are working as a hurdle for some leading automobile manufacturer whereas some automobile companies have taken that challenge and leveraged themselves with the technology to gain competitive advantage.

Leave a Reply

Your email address will not be published. Required fields are marked *