The automotive industry has been, and still is, going through a period of huge change. We recently spoke to Andy Barrett, Deputy CEO of Abdulaziz Ali-Al Al-Mutawa in Kuwait about the key trends to look out for in 2024.
It’s no surprise that the first big topic on Andy’s list was electrification.
EVs – the growth goes on
According to Autocar’s first market intelligence report this year, in January 2024, the number of new electric cars registered in the UK grew faster than any other fuel-type, increasing by 21%. Demand for used electric cars increased by 61%.
How can OEMs meet this demand? And significantly, how can they create an affordable business model, given the high costs associated with battery technology? Taken in conjunction with the other key trends converging in the automotive industry (connectivity, autonomous driving and shared mobility), plus the new electric vehicle entrants pushing into the market, OEMs are being forced to look at their overall organisational structure. Do they want to follow an agency model? A hybrid? Or can they afford to stick to a conventional distributor model? It’s time for fresh thinking and radical change, says a recent Accenture report. It’s hard to disagree.
New brands, new markets
Another key change for the global automotive industry is the entry of some powerful new players. Chinese brands, for example, are now emerging as a strong force, with 3 in 5 electric cars produced in China, offering advanced powertrains, great styling and great connectivity.
These brands are already well known in their home territory, but now they’re emerging as a real force in developed markets in Western Europe. In fact, in some markets they now have up to 30% market share.
As the developing markets in the Middle East continue to grow, it will be interesting to see how they learn from mature markets like Western Europe and the UK, which are currently much more advanced in terms of their sophistication, precision and accuracy. There is a hunger in the Middle East to develop in thinking and leadership, says Andy, particularly around aftersales, used cars and financing. Although the Kuwaiti market is far smaller than the UK (100,000 units compared to 2 million), it’s no less competitive.
New technology
The technology behind EVs is growing ever more sophisticated, with solid-state and lithium-sulphur batteries increasing mileage and fast-charging technologies reducing charging time.
More broadly, as in every industry, advances in artificial intelligence are changing the picture for the automotive world. AI offers extraordinary opportunities, both in terms of manufacture and consumer experience. Will brands use new technology to change the future of cars, as Toyota have claimed in a recent press release?
A supply push market
During the Covid-19 pandemic, lockdown created a semiconductor shortage, which meant higher prices and issues with availability. That in turn led to a period of high profitability.
Today, we’re moving into a supply-push market. Effectively, retailers are having to make more calls to chase fewer customers. So how do you keep the customer loyal and continue the relationship with them when they could easily be tempted away by competitive offers elsewhere?
Changing consumer behaviour
Customer loyalty is something that no retailer takes for granted. With so much choice available, consumers these days are more open to new brands, and some established manufacturers have lost market share.
What’s the answer?
Andy believes it’s about the customer experience. About offering real value. And that doesn’t necessarily mean being the cheapest. Retailers have to think about the whole value proposition. Are you relevant to the customer? Have you got your digital journey right? Are you easy to deal with? It’s striking to note that 88% of consumers say the experience a company provides is as important as its products or services (Salesforce, 2023).
The digital journey
As we all know, shopping online is quick and convenient – and that’s what today’s consumer expects. Consider these statistics:
In 2022, 82% of UK citizens bought at least one item online (Trade.Gov, Mordor Intelligence)
69% of people planned to buy a car online in 2023 (AutoTrader)
96% of prospective auto buyers in the UAE and Saudi Arabia initiate their journey online (Roland Berger)
Retailers who are always available online, and willing to go above and beyond to help, are offering an experience that customers value. Get it right and the rewards are there. You earn the customer’s enduring loyalty. You can build a long, profitable relationship with them.
Continuous improvement
Offering a seamless journey that engages the customer and inspires loyalty is a virtuous circle. If you become known as the best in town, then you attract the best people to work for you. This idea is reflected in the Japanese business philosophy of Kaizen (kai means change, zen means better). Corporations such as Toyota use it to boost efficiency and performance, eliminate waste and optimise the use of resources.
At Keyloop, we’re also on this journey of continuous improvement. Our Experience-First platform puts the consumer at the heart of everything we do, delivering experiences that are:
Unified – our ecosystem of applications and partner connections creates synergy
Frictionless – digitised processes save time, simplify administration and streamline operations
Distinctive – however and whenever consumers connect, they get an experience that exceeds expectations
Simplified – one trusted, powerful DMS foundation unifies data from multiple points with ease
Connected – a continuous, 360 degree view of customers and data gives invaluable insights
Andy Barrett has worked with Keyloop for many years. He believes Keyloop has the vision and the tools to empower businesses to meet the challenges ahead. “The benefits that we’re going to derive going forward are truly immense,” he says. “And I’m really excited about what’s coming from Keyloop going forward, in terms of what that’s going to do for our service and the way we operate as a business.”
