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Industry Trends to Watch Leading Into 2024

As we near the final stretch of 2023, the automotive industry sits at a crossroads, adapting to the transformative shifts that have marked the year. From the accelerating focus on vehicle technologies to the impact of online platforms on car sales, the automotive landscape is evolving. Let’s explore the key trends that have helped define the industry this year and are set to continue into the new year.

Emerging Technologies and Autonomous Driving

Emerging technologies are transforming the automotive industry, giving drivers the choice to be as connected or disconnected from their vehicles as they like. The continuous improvement of autonomous driving technology is looking to provide drivers with varying levels of control over their vehicles’ movements. Simultaneously, other technologies facilitate connections between car owners and their vehicles. Cars continue to become more technologically advanced, with some equipped with their own apps and other tech modes. Technological innovation is paving the way for a more interconnected and dynamic driving experience.

The Online Revolution in Car Buying

A shift towards online research and shopping has been reshaping industries for the past decade, and the automotive sector is no exception. The pandemic acted as a catalyst, triggering a surge in online sales that has persisted even as restrictions eased. In 2023, 81% of dealers want salespeople to have the option to use digital tools to help connect with shoppers, and 91% of shoppers would like the option to interact digitally at the dealership. Following the likes of Carvana and Vroom as online vehicle selling platforms, Hyundai has taken steps to become the first automaker to utilize Amazon, with the pilot program beginning in January 2024. The industry will wait to see if the partnership is successful as the industry continues to introduce digital tools and dealers face the prospect of adjusting to operational changes in the car-buying experience.

Heightened Car Prices and Interest Rates

A persistent challenge facing both dealers and consumers has been the upward trajectory of vehicle prices coupled with elevated federal interest rates. Despite some improvement in vehicle affordability compared to 2022, the industry is still facing a lingering gap between inventory and consumer preferences, which was worsened by the pandemic and UAW strikes. As we step into 2024, the industry anticipates strategies from automakers aimed at bridging the divide and making vehicles more accessible to a broader market. Finding solutions that balance quality, affordability, and consumer demand will be paramount in the year ahead.

The Rise of Hybrids and Electric Vehicles

In 2023, the global call for cleaner, more sustainable transportation took center stage, with EVs and hybrids accounting for 16% of light vehicle sales in the United States by the second quarter. Governments and consumers seem to be shifting towards EVs, but the industry finds itself at a critical juncture. The swift pace of EV production raises valid concerns, with some fearing it might outstrip the development of necessary infrastructure and consumer acceptance of EVs over traditional gas-powered vehicles. As we enter 2024, the industry must navigate the delicate balance between production, infrastructure, and consumer readiness.

Key Takeaways

Emerging technologies, the digital revolution in car buying, affordability challenges, and the increasing prominence of EVs and hybrids are driving the automotive industry towards an exciting journey into 2024. Yet, as we look forward, it’s crucial to acknowledge that the market is subject to unpredictability, and we can never truly predict the road ahead. Buckle up as the industry steers towards a future where innovation and adaptability help redefine the driving experience.

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