Trillium Automobile Dealers Association

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Eight auto industry trends to watch for in 2012

Published on Friday, 06 January 2012

Several weeks ago, I reviewed the top trends that impacted the retail auto industry over the past year. Today, I want to examine some of the important trends looming on the horizon for 2012.

  1. Pent-up demand. A surge in new car sales at the tail end of 2011 highlighted a growing trend to discard older vehicles. According to DesRosiers Automotive Consultants, there is a “20 per cent increase over the past five years in the number of vehicles on the road that are 16 years or older.” As a result of this pent-up demand, auto analysts have forecasted that new car sales should increase steadily throughout 2012.
  2. Smartphone revolution. According to comScore, smartphones account for 40 per cent of the cell phone market in Canada and that trend will continue to climb. Automakers like Ford and Toyota are leading the way in terms of integrating infotainment systems with mobile devices (smartphones). Look for more manufacturers and dealers to develop smartphone strategies to better help them communicate with their customers.
  3. Targeted communications. Mobile smartphone applications, text messaging, e-marketing campaigns and social media platforms are some of the unique ways that dealers are using to digitally connect with customers. This trend toward mobile/digital communications will accelerate throughout 2012.
  4. China and India. These two countries continue to exert a powerful influence on the global automotive market (in 2009, China overtook the U.S. as the world’s top seller of automobiles). Automakers are now making car designs to suit Chinese tastes. A recent U.S. report ( GfK Group) indicated that 38 per cent of car buyers would consider buying a Chinese-built car, and 30 per would consider buying an Indian-built car. Clearly, the demand is there. It’s only a matter of time before Indian- and Chinese-produced automobiles are available in North America.
  5. Traffic to dealerships. Walk-in traffic has declined slightly in recent years. But the car shoppers who are showing up are more educated and informed than ever before. They have thoroughly researched the price points, performance statistics, accessories, consumer reviews, etc. The age of the savvy, well-informed car shopper is here to stay.
  6. Increase in MPG. For more than a year, the average fuel use by new vehicles has been declining. Cars sold by U.S., European, Japanese and Korean automakers have shown steady increases in miles-per-gallon and kilometers-per-litre 2010 to 2011. This industry-wide trend in producing more fuel-efficient vehicles will continue.
  7. Gas-powered engines. Although hybrids, electric vehicles and diesel-powered models are available, gasoline-powered engines will continue to dominate the Canadian market. The trend is toward smaller and more fuel-efficient gas engines that offer more power and spew out fewer emissions. This one-two combination will serve as a powerful incentive for new car buyers.
  8. The re-invention of the automobile. The auto industry is in the midst of a total transformation, with new methods being developed to deliver power to the wheel. The way we buy and service vehicles will be completely changed in 10 years. Which of these technologies — clean-burning diesel, hydrogen, hybrid and electric — will dominate in the marketplace then? One thing is certain: automobiles will be greener, smarter, better connected and more fun to drive.

On that positive note, I wish all readers a Happy New Year, and safe driving!

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