Automotive Industry: Overcoming COVID-19

Mujer en el interior de su coche

The negative impact of COVID-19 on the automotive industry was immediate. Sales dropped, and production, supply, and service flows were either interrupted or transformed. Faced with the pandemic, the industry is experiencing the need of digital transformation, diversification of relationship channels and reconfiguration of vehicles – in line with changes in behavior that were already being announced and with new challenges brought by the coronavirus. Read about how large players in the industry have been dealing with the main changes in this market.


The Sales Dance

The industry was already suffering from the drop in car sales, and this was aggravated by COVID-19. But, paradoxically, it is expected that consumer groups will be encouraged by the pandemic to buy a car. These are people who started to avoid public and shared transportation due to hygiene concerns. A study done by the Capgemini Institute and published in April reveals that this factor influences 75% of the consumers who intend to purchase a vehicle in 2020. Brands must take this into account when offering new products, services and accessories.


Mobility as a Service

Expect an expansion of Mobility as a Service, which was already growing before the pandemic and should be accelerated. This phenomenon reduces the focus on vehicle sales and turns the automotive industry into a service platform. As a result, services such as subscriptions and daily or hourly pay-per-use gain momentum. Earlier this year, Mercedes-Benz extended its Ready to Smart, a sharing service based on mobile app that identifies the nearest Smart vehicle available for rent, to the main European countries. Another interesting initiative is the partnership between FCA and VISA, which allows the use of connected cars as a payment method at gas stations, convenience stores, drive-thrus and so on. 


Digital Transformation

Data from the Capgemini Institute reveals that 52% of potential car buyers prefer to search for information on vehicles online – before the pandemic, this percentage was 44%. Within this context, it’s the experience that differentiates one brand from another: the old CRM gives way to Customer-Centric Experiences. This concept is strengthened by the robust use of data analysis, personalization and programmatic media tools. A successful digital transformation plan earned Susan Moffitt, CEO at Porsche Shreveport (USA), the title of Dealer of the Year at NADA. The company has invested in a 100% digital shopping experience and a multichannel presence. 


Car Diversification

The arrival of 5G will accelerate mobility as a service and car diversification. One of the main features of the car of the future is hyperconnectivity: a McKinsey study says that by 2030, 45% of the new cars sold will be hyperconnected. Aware of the growth of entertainment features in this type of vehicle, Sony launched at CES, in January in the USA, the prototype of an electric car called Vision S, which explores the idea of connected vehicles as entertainment and leisure environments. 


Social Responsibility

Brand Purpose has been evolving into Brand Action, a stage in which brands take action and put their social responsibility and purpose handbooks into practice. This movement involves reducing air pollution emissions and investing in electric vehicles. In France this year, Citroën launched an  electric two-seater quadricycle. It was named AMI and it contains all the concepts of mobility and sustainability.