The automotive sector is investing more in digital marketing channels to improve its sales growth.
FREMONT, CA: Due to the CASE (Connected, Autonomous, Shared & Electric) megatrends, the automotive sector was already experiencing real disaster because of the consecutive years of global degrowth and significant business model disruption. The new pandemic of COVID-19 has brought the already complicated situation to another scale. On a global scale and at an unprecedented speed, there are disruptions in both supply and demand.
The automotive industry will need to navigate into a new normal after COVID. Here are some of the potential situations and areas of impact:
To continue operations, liquidity prioritization may starve R&D or other technology initiatives.
• The supply chain is a critical issue for C-level leaders.
• An expedited movement towards pay-as-you-use models.
• Reduced demand would put tremendous pressure on the sales and profitability of automakers.
• The probability of a rise in M&A activities to merge operations during difficult financial situations.
• Social distancing will have a massive effect on consumer behavior, and the use of digital technologies and customer engagement platforms will become essential.
Supply chains conduct a balancing act among cost and service and are continuously adapting to the most cost-efficient way to deliver reliable service. By applying lean practices and just in time inventory strategies, supply chains recognize lower costs. While such methods work well under normal operating conditions, they do not react well when exposed to a significant disturbance.
After COVID, the automotive sector foresees a growing focus in the fields of supply chain strategy. Deep and near-real-time visibility across the supply chain layers, advanced supply chain risk modeling, early event identification capability, component replacement, and automation-ready processes are some of the areas where OEMs can work. The automotive sector will likely develop versatility, durability, and cost-efficiency in the supply chain in the future.
Digital customer engagement
Physical consumer experiences at dealerships and car shows would decrease due to the COVID-19 outbreak, either due to regulatory requirements or through preference. It would lead to increased demand in the digital media for interacting with prospects and customers. There will be much more investment in digital marketing channels and an acceleration in process digitization efforts. It will allow the required physical channel rationalization. Some sectors, including banking or e-commerce, are even higher up in the maturity curve in embracing digital customer service practices. In order to have a steeper learning curve, the automotive industry should benefit from some of these industries' best practices.