4 Sustainable Consumer Trends Reshaping the Automotive Landscape

The rapid development of emerging markets, newer technologies, sustainable policies, and changing consumer preferences to shared transport and sustainable alternatives is changing demand and growth of the global automotive industry. According to a report by McKinsey, while overall car sales will continue to grow despite these developments, it will reduce from 3.6% (which has been the annual sales in the last five years), to 2% annually by 2030. 

In this blog, we look into the technological and economic factors that are impacting demand planning in the global automotive industry, and how these will shape the future of transportation. 

Emerging Markets Are Steering Ahead in Tech & Sales 

Despite the pandemic and emerging technologies disrupting the global automotive sector, emerging markets like China, India and Brazil have performed better than most experts predicted. Today, China is the fastest growing market, and the largest market by the number of vehicle sales, and India is fastest growing global vehicle market.  

According to a report, China has sold as many vehicles as the European and US markets combined. Another report shows that in 2022, India was the only country which showed market recording growth, while car sales everywhere else were flat. 

But, what are emerging countries doing right to sustain this growth and demand? A McKinsey report suggests that it’s combination of measures to improve their own effectiveness, and encouraging competition, which drives growth.  

A Merit expert says, “Let’s say the Government introduces policies around developing market-oriented reforms, creating stronger social safety nets, building robust infrastructure, and introducing reforms that benefit the product and labour market. It can benefit the automotive industry by encouraging competition and innovation. When a Government creates a level playing field, more players can come in and promote healthy competition.”

In addition, reforms to prevent corruption, and create transparency can also create a stable environment for businesses to operate in. 

How Tech is Steering Demand Dynamics 

Modern technologies are playing a critical role in shaping the demand for automobiles. Importantly, there are four technologies that are steering this change; diverse mobility, autonomous driving technology, electrification of vehicles, and greater connectivity. 

Diverse mobility is a shift in the consumer mindset from traditionally owning vehicles to exploring alternatives like ride sharing and subscription services. Autonomous driving technology is the emergence of self-driving cars that can operate with minimal or zero human intervention. Electrification is the shift in demand for and adoption of electric and hybrid vehicles over internal combustion vehicles. And lastly, connectivity is the emergence of technologies that enable vehicles to interact with each other, and enable real-time communication and data sharing. 

These technologies are influencing automotive demand and business models in several ways. For example, as electrification becomes more prevalent, there’s a need for automakers to develop more energy efficient and eco-friendly vehicles.  

Autonomous driving technology has the potential to enhance ride-sharing services, deliveries and the like. And, connectivity with predictive analytics is capable of improving the overall driving experience by providing real-time traffic updates, monitoring component performance, giving inputs to improve fuel efficiency, and more. 

Influence of Sustainable Policies 

Global automobile companies are implementing several strategies to address environmental concerns and foster social responsibility. These strategies and policies also promise to enhance the resilience of the corporate value chains, improve their financial standing and boost their corporate reputation.  

For example, BMW has introduced measures to reduce carbon emissions per vehicle by 20% before 2030. Tesla has set renewable energy goals and committed to achieve 100% renewable energy by 2030. Ford, known to be one of the world’s most ethical companies, has taken measures to advocate workplace diversity, inclusion and equity. And, lastly, General Motors has committed to achieving zero waste in landfills through composting and recycling across global manufacturing sites.  

EVs & Intuitive Tech Reshaping Consumer Preferences 

Changing consumer preferences are significantly influencing demand in the global automotive industry. According to the 2023 Global Automotive Consumer Study by Deloitte, there is a growing consumer interest in electric vehicles (EVs), prompting automakers to prioritise sustainable practices and alternative fuel models. The study reveals that consumers are actively seeking intuitive technology in vehicles, showing a willingness to pay for advanced features. Specifically, consumers are favoring electric vehicles due to their eco-friendly nature, pushing the industry towards a more sustainable future. Additionally, the demand for intuitive technology highlights a desire for seamless integration of smart features within vehicles, further shaping the industry’s trajectory. This shift in preferences toward environmentally friendly and technologically advanced vehicles is compelling automotive manufacturers to adapt their product offerings to align with the evolving demands of the market. 

It’s safe to say that the global automotive industry is on the brink of transformation. The synergy between emerging markets, cutting-edge technologies, sustainable initiatives, and evolving consumer preferences indicates a future defined by diverse mobility solutions, electric vehicles, and smart technologies. As industry leaders commit to environmental responsibility and innovative advancements, the industry is primed for a transformative journey, promising a more sustainable, connected, and consumer-centric automotive experience. 

Key Takeaways

• Shift in Consumer Preferences: Changing consumer preferences, as highlighted in the Deloitte study, indicate a growing interest in electric vehicles (EVs) and a willingness to pay for advanced features. This shift is compelling automotive manufacturers to prioritize sustainable practices and adapt their product offerings to align with the evolving demands of the market. 

• Technological Advancements Driving Change: The blog emphasizes four key technologies—diverse mobility, autonomous driving, electrification of vehicles, and greater connectivity—that are steering the transformation in the automotive industry. These technologies are influencing demand dynamics, business models, and the overall driving experience, showcasing the industry’s move towards innovation and adaptation. 

• Impact of Emerging Markets: Despite disruptions and technological advancements, emerging markets like China, India, and Brazil have outperformed expectations in the last five years. Government measures, such as market-oriented reforms, infrastructure development, and competition encouragement, have played a significant role in sustaining growth. The success of these emerging markets highlights the importance of effective policies in fostering a conducive environment for the automotive industry. 

• Sustainable Policies Driving Corporate Initiatives: Global automobile companies are actively implementing strategies and policies to address environmental concerns and enhance corporate social responsibility. Examples include carbon emission reduction targets, renewable energy goals, workplace diversity advocacy, and waste reduction commitments. These initiatives not only contribute to environmental sustainability but also promise to improve corporate value chains, financial standing, and reputation in the eyes of consumers. 

Merit’s Expertise in Data Aggregation & Harvesting for the Global Automotive Sector

Merit Data and Technology excels in aggregating and harvesting automotive data using AI, ML, and human expertise. Our capabilities include:

• Crafting end-to-end data pipelines and scalable data warehouses 
• Designing compliant governance solutions for seamless integration 
• Utilising high-volume, high-velocity data tools for nuanced insights 
• Extracting retail product attributes and audience data 
• Aggregating industry-specific data points for informed decision-making 

Trusted by leading automotive brands, Merit drives innovation and efficiency by delivering refined, actionable insights.