Having endured a tough time during the pandemic, the automotive industry is finally re-emerging and it appears to be even stronger than it was beforehand. According to Euromonitor, unit sales in 2022 are expected to be around 78 million units (up 10% on 2021, which is itself up 10% on 2020), beating pre-pandemic levels. On top of this, the automotive industry is continuing to see huge changes in business models as the rise in electrification continues as well as advances in connectivity technology. For these reasons and many more, we felt it was as good a time as any to look into the top trends affecting the motor industry in 2022.
Connected cars are vehicles that are connected to the Internet, but more specifically the Internet of Things (IoT). These vehicles provide a safe, comfortable, convenient multimedia experience by using on-demand features that allow you to do anything you want on the web while in your vehicle. Connected cars can communicate bi-directionally with a range of other systems outside their local area network. These cars can share internet access and data with devices inside and outside of the car. Connected cars now send digital data and remote diagnostics, vehicle health reports, data-only telematics, access 4G Wi-Fi Hotspots, get turn-by-turn directions, warn of car health issues and directly intervene to prevent breakdowns. Connected car technology is due to explode on the scene in diverse ways in 2022 using predictive intelligence and maintenance technology. Together, they will totally transform the user experience and push the boundaries of personalisation, while opening up innovative business models and potential recurring revenue streams for auto manufacturers.
There appears to be a bright future for new vehicle ownership models like leasing and vehicle subscription. Highly flexible contract durations, shorter vehicle commitments, and easy vehicle swapping will offer huge benefits for consumers but this could come at a cost of high subscription fees, which may not be so enticing. In order for vehicle subscription to be successful, therefore, automakers will need to set in place a business model that covers not only the premium needs of the market, but also successfully offers affordable, price-sensitive and competitive variants that can be easily accessed by consumers. Another point to consider will be to include young used cars at an affordable price point, this will ensure a fleet mix of both new and used cars which can cater for both ends of the customer spectrum.
The Fuel Cell Electric Vehicles (FCEVs) versus the regular Battery Electric Vehicles (BEVs) battle will become more and more intense. This could be the year that FCEVs start to pull ahead, they have 3-5 times the range of BEVs, recharge faster, and have zero exhaust emissions other than pure water. Car manufacturers are pumping more money into FCEV development, while governments in Germany, China, South Korea, Japan and the USA are also throwing their weight behind FCEVs. If you’re considering going electric, we’ve previously covered the main reasons for driving an electric car and have answered if it’s cheaper to insure an electric car.
Autonomous self-driving vehicles are already here and will become even more prevalent in 2022 and beyond. And that is great news, because research has shown autonomous vehicles are safer, reduce downtime, expand the last-mile delivery scope, reduce driver stress and driver negligence-related accidents. Beginning in 2022, it will become much more common to see autonomous vehicles on our roads, whether it’s a fleet of trucks or one of the many new brands looking to enter the market such as Cruise, Alphabet Inc's (GOOGL.O) Waymo and Aurora Innovation Inc .
The biggest challenges facing a faster market introduction are pricing, consumer understanding, safety/security concerns and regulatory issues. Regarding technological readiness, tech players and start-ups will likely also play an important role in the development of autonomous vehicles. Regulation and consumer acceptance currently represent the biggest hurdles for autonomous vehicles. However, it seems that addressing and overcoming these challenges is only a matter of time, and afterwards autonomous vehicles will offer tremendous value for consumers. A progressive scenario could see fully autonomous cars accounting for up to 15 percent of passenger vehicles sold worldwide by the year 2030.
Tip: Read our tips for driving safely in different conditions.
3D printing is set to continue to bring many benefits to the automotive industry. So far, it has three main effects on the auto industry. Firstly, it allows for rapid prototyping with 3D printed models that accelerate the design and testing phases in the pre-manufacturing stage. Secondly, more robust materials for 3D printing, such as fused filament fabrication (FFF),now allows manufacturers to print spare parts that are fit for end use, and easily and efficiently match manufacturers requirements. Lastly, additive manufacturing of composite materials leads to automotive parts that are lighter, stronger, and more durable. This is all great news for consumers.
Automakers in both North America and Europe have started offering consumers the option to skip the visit to the car dealership showroom and pick and purchase the vehicles they want online. Buyers can now shop at their convenience on their laptop or smartphone, explore and select the features they want on a vehicle and also have the option of finding the financing they need. In addition, dealerships now offer online sales, let an online buyer use virtual walk-around technology, facilitate at-home test drives and do home delivery of vehicles they sell. This is currently not available in Ireland, but it seems it will only be a matter of time before we can purchase a brand new car without leaving our homes.
There is a boom in used car sales that has been happening for some time now. The current demand is high and rising, particularly for vehicles four years old or newer. These vehicles have lots of the latest automotive technologies but are not as expensive as new vehicles. This includes pre-owned electric and hybrid automobiles. Dealerships now have inventories full of certified pre-owned cars that look, feel, and function like new cars but cost much less.
This trend means that an already difficult second hand car market in Ireland is due to become even tougher. According to research from DoneDeal, in the last three months of 2021, the inflation rate for used cars grew a further 7.7%, the second highest quarterly price rise since 2011. And due to Brexit, imports from the UK have become increasingly expensive, reducing the incoming supply. This has further reduced the amount of second hand cars available as previously the shortfall in second hand cars in the Irish market had been made up by these imports from the UK.
If you are in the market, we do have tips for buying a second hand car and also advice on what to look out for when buying a new car. No matter what you choose, insuring your car with AIG offers you the best protection with many benefits such as 24/7 breakdown assistance, No Claims Discount and also windscreen cover. And you can save 10% on your premium if you apply online.