By Lauren Fix, The Car Coach
The automotive industry faced some unique circumstances in 2020. Car dealerships and automobile factories quickly faced new selling strategies amid government-mandated shutdowns.
What changes and trends can we expect in the automotive industry? What do leading automotive experts think about the biggest trends to impact car brands, dealerships, and consumers in 2021?
Trends focus on autonomous vehicle progression, car inventory, and sales, which we cover to give you Car Smarts. The digital vehicle buying experience, electric vehicle advancement, and new vehicle technology are just some of what you will see soon. How will this affect you?
These automotive trends will impact you:
- Although interest in autonomous vehicles continues to grow, fully autonomous vehicles will not be available in 2021.
- Look for new vehicle incentives later in the year as dealerships restock inventory because of COVID and the chip shortage.
- Pandemic restrictions have shifted focus towards the digital car-buying experience. Dealerships are shifting to digital and physical car-buying strategies.
- New environmental initiatives and government incentives are expected to fuel the electric vehicle market.
- 5G connectivity on the Internet will help improve automaker processes and provide new connectivity tools for drivers.
Many car brands have joined the race to create the first autonomous vehicle. However, experts predict that a fully autonomous vehicle will not hit the market for at least another 5 to 10 years. Investing in autonomous solutions is expensive and risky, especially during uncertain economic times. Ethical issues continue to be a major obstacle for programming an autonomous vehicle to keep car passengers and other road occupants safe.
Several new vehicles have autonomous settings such as lane departure, collision avoidance, adaptive cruise control, street sign recognition, etc. These features still require your attention but allow for sensors on the road for improved safety.
Some auto manufacturers such as Tesla, Cadillac, Ford, Mercedes -Benz, and Audi currently sell car models with an autopilot type feature. Autopilot enables cars to operate independently of the driver within the artificial intelligence guidelines. However, these cars are not equipped to use autopilot in all weather conditions and terrains without a driver behind the wheel. Consumers interested in autonomous vehicles may choose to upgrade to a car with self-driving features. Just be aware that cars with autonomous settings are often much more expensive than the basic models. Many drivers buy this technology but do not use it regularly.
The Covid-19 crisis and a chip shortage have caused dealers difficulty obtaining new vehicles. The impact of low inventory will have a direct impact on both dealerships and consumers. This also increased the costs of used cars.
As of January 2021, major car manufacturers are experiencing a chip shortage crisis used in cars and electronics. Semiconductor chips are used to power critical vehicle components such as the brakes and power steering, and infotainment systems. High-end models with complex interworking require more semiconductor chips to operate. Consumers can expect to see delays in vehicle launches for new 2021 models. Experts predict that the inventory shortage will likely be resolved by mid-year.
The era of digital car buying has become commonplace due to safety concerns—a genuine driving factor of the digital car-buying market. The opportunity to find the perfect vehicle without spending hours at a car lot has created demand among millennials. Consumers may spend more of their time online researching vehicle specifications. Buyers are looking for new and used vehicles at dealers and online sites such as Carvana, Car Gurus, Vroom, CarMax, and others.
Government regulations have been steering consumers towards electric or plug-in cars. Consumers continue to purchase diesel, gas, and traditional hybrid vehicles. The electric car market faces obstacles such as a lack of charging stations, high prices, and experimental technology. Currently, government incentives may be the only factor strong enough to help grow the electric vehicle car market.
Sustainability initiatives are pushing more auto manufacturers to produce eco-friendly vehicles. Companies producing trucks and SUVs must pivot to produce vehicles that are both large and sustainable. However, auto manufacturers must balance these new initiatives with current customer demand to remain profitable. Current buyers are only 2 percent of 15.5 million cars sold in the US.
After the deep freeze in Texas, those with electric plug-in cars were very frustrated. I foresee a shift in electric vehicle production due to the corporate average fuel economy standards.
The new corporate average fuel economy (CAFE) standards are set to a 1.5 percent increase per year. Automakers are expected to increase fuel economy and decrease carbon emission by 1.5 percent every year. These regulations are set in place from 2021–2026. The government continues to put pressure on automotive companies to create reliable vehicles with fewer environmental impacts.
Other emission reduction initiatives are expected to follow. The administration plans to deploy close to 500,000 charging stations across the United States to make charging more accessible. Other future initiatives include replacing the federal vehicle fleet with electric models and increasing the electric vehicle tax credit for consumers. A prospective car buyer may want to consider some of the upcoming incentives for electric vehicles. Also, check your insurance rates. Electric vehicles are much higher than comparable gas-powered autos.
Companies are rolling out 5G technology and networks to cities across the United States. Drivers can expect better integration among their smartphones and car infotainment systems, along with increased Wi-Fi availability. The increased connectivity of 5G networks is speeding up the adoption of new vehicle technology.
Consumers in the market for a new car should consider the effect of 2021 automotive trends on their car buying experience. The second half of 2021 may be a better time to purchase a new vehicle when automakers will likely catch up with inventory shortages and dealerships bring back incentives.
Do you agree or disagree with these car trends for 2021? Let us know your thoughts below or comment on the NMA’s Facebook Page.
Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, analyst, author, and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.
Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on ABC.com with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak.
Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum, and Juror / President for the North American Car, Utility & Truck of the Year Awards.
Check her out on Twitter and Instagram @LaurenFix.