Powering Monetizing Opportunities in Global Automotive Retail, Forecast to 2030
Apart from providing a host of key market innovator profiles, this research highlights the opportunities that can be mined with the application of digital transactions in the automotive industry. The study showcases the potential areas for automakers and suppliers for investment and for technology companies to focus on to maximize their revenue potential in the automotive industry. As the automotive industry is facing narrowing margins, the need to look for other revenue streams and also keep the customer committed to the brand is paramount. This can be achieved by creating an experience across the lifetime of the customer's ownership.
The need for manufacturers to look beyond initial vehicle sales and periodic maintenance revenue focusing on providing a personalized in-vehicle experience through allied service partners is critical to the future of the automotive industry. The role of fintech in enabling an industry-wide transition from a transactional to an experience-centric one is important to help the traditional ecosystem embrace digital transformation. Automotive companies are focusing on reducing the technology gap and improving customer experience with new customer touchpoints through fintech partnerships in retail and finance. Online retail spending is expected to cross $3 billion by 2025, with several digital feeder systems, including digital lead generation, eCommerce platforms, and 100% online retailing. A mature market worth more than $1 trillion is yet to be disrupted by digital financing options. Banks and original equipment manufacturers (OEMs) are looking for partnerships and pilots to get the right offering mix. In the insurance space, digitizing insurance claims processing will help insurers eliminate fraudulent claims while reducing processing time by 80% and lowering settlement overhead cost by 90%. Technology companies such as Google and Tencent are expected to lead the digitization of on-demand convenience services as OEMs strive to ensure that revenue stays within the core automotive ecosystem.
China is an important global growth engine for technology innovation. The disruption is more evident in China, where technology companies, eCommerce firms, and automakers do not hold back with their retail innovation. Facial recognition linking online and offline initiatives and reimagining vehicle test drive experiences are some of the areas where the traditional automotive practices are being transformed.
Leading the way is Alibaba that operates the country’s largest eCommerce platforms and has more than half a billion consumers shopping on its marketplace. While online sales penetration in China is the highest in the world, brick-and-mortar retail still accounts for more than 80% of total retail sales. Alibaba is not shying away from influencing automotive retail practices.
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