Industry trends changing automotive development
When customers buy an automobile, they base their choice on many factors, including vehicle dynamics, functionality, quality, infotainment features, styling, design and more. Subsequently, original equipment manufacturers (OEMs) need to cater to a wide range of demands to target their valued consumers. Vehicle individualization, technological changes, and societal trends are driving up the complexity of automotive product development, while also changing the nature of the game. Differentiation is increasingly found via onboard software and electronics, causing manufacturers to produce more advanced vehicles to remain competitive. And as internal and external needs shift rapidly, it creates a significant challenge for manufacturers to bring a desirable vehicle to market.
Deciding how to respond to technological and market trends cand be a challenge for automotive companies. Not every technological trend or investment is successful, and many don’t even come to fruition, while market trends can change in an instant. In turn, companies respond to different aspects and trends within the industry. Companies possess a degree of individuality and advance at different rates in their technological development, and therefore must respond appropriately within their parameters to address the market’s changing needs.
The budding market for electric vehicles offers an instructive example. Most automakers were relatively slow to jump on the EV wagon. Indeed, there are still massive challenges for electrification, especially in the development of a widespread charging infrastructure. Therefore, only a few visionary companies that were confident in their offering risked it in the EV market early on.
Now, we are closer than ever to achieving a justifiable EV business model that is financially positive for OEMs, service dealerships, and brick and mortar battery plants globally to support the market. The supply and market demand will determine whether it ultimately succeeds, but the recent wave of EV announcements indicates that the automotive industry sees the potential. And the EVs that are currently being developed and produced are among the best vehicles on the market, gasoline or otherwise. There are some extraordinary designs because there’s so much freedom with packaging and architecture. After all, the battery pack requires less space. In turn, there is much less restrictive packaging and thermal management around that subsystem as opposed to a battery-driven powertrain. The result is vehicles that are very compelling, giving EVs more traction in the market.
For both the early adopters and new entrants to the EV space, we have seen digitalization act as a catalyst for innovation. Companies that adopt a digitalized approach are better able to adapt to dynamic market demands while creating some of the most exciting vehicles we have seen. Learn more about other compelling technological factors that are challenging this marketplace.
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