Navigating the latest automotive trends

As we continue on the highway of 2024, the automotive industry stands at the crossroads of innovations and shortages, with new challenges and opportunities that it may face in the coming months. This year promises to be filled with exciting developments, more sustainability options, and solutions that will revolutionize how automobiles are perceived.

Local car sales are expected to continue to carry the momentum of 2023 in the next eight months as the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) forecast another record-breaking year and a 9% increase from last year’s sales of 429,807 units to 468,300 units in 2024.

“We are starting 2024 with a positive business and consumer confidence outlook. We see new model introductions and the expansion of electrified vehicle line-up especially in the hybrid electric vehicle segment, and more brands coming into the market,” CAMPI President Rommel R. Gutierrez said.

Furthermore, electric vehicles (EVs) are becoming more popular in the country as Filipinos look for more sustainable options due to increased awareness of climate change and its environmental impact.

According to data from the Electric Vehicle Association of the Philippines (EVAP), 2,557 e-vehicles were sold in the country from January to June 2023 alone, a 500% increase compared to 426 units sold in the entire 2022. The group forecasts sales to continue skyrocketing during the decade and projects around 6.6 million registered electric vehicle units by 2030.

“By 2030 most of the manufacturers won’t be doing any more [internal] combustion engines or ICE. So, everything will be electric. Obviously, new car sales or vehicle sales will be all-electric. If ever there will be some combustion engines, only a small amount,” EVAP Chairman Emeritus Ferdinand I. Raquelsantos was quoted as saying in a report from The Philippine Star.

Globally, Bloomberg expects 16.7 million EVs sold in 2024, a 21% increase from 13.8 million units last year. Meanwhile, the research platform Market and Markets reported the installation of over one million charging points for EVS in 2023 with more expected to be built in 2024.

Digital’s involvement in automotive

Another trend for car enthusiasts to look out for in 2024 is the overall involvement of the internet in the automobile industry. Generally, car shoppers go online when researching potential automobile purchases. Software company Ruler Analytics found that nearly 95% of vehicle buyers use digital channels as a source of information instead of going to dealerships.

Additionally, data from Forbes suggests that online car purchases, where the full car buying experience is digital, may reach 7.1-7.3 million units sold globally this year. Meanwhile, Statista projects online vehicle sales to gain more popularity within the decade and be worth around 176.24 billion U.S. dollars in 2031.

Furthermore, cars with a Wi-Fi hotspot have become more appealing to drivers who travel for business and pleasure. Following Chrysler’s release of a Wi-Fi-enabled vehicle in 2008, other car manufacturers have quickly followed suit, offering built-in Wi-Fi access in most new models in the market today.

Daunting challenges

Despite these opportunities and positive trends in the automotive industry, there are also some challenges that may arise for the sector within the year. American insurance company Progressive notes that the pandemic in 2020 led to a manufacturing pause that not only drastically decreased vehicle production that year but also brought supply chain challenges felt four years later.

In an effort to slow down the spread of COVID-19, people stayed in their homes and fewer automobiles were used. Car manufacturing also stalled in 2020 and did not ramp back up to 2019 levels until July of that year. This led to the automotive industry producing fewer cars and selling fewer vehicles due to the low demand. While car production numbers slightly increased in the following years, Progressive foresees some level of unpredictability for the foreseeable future.

Geopolitical issues and wars may also lead to supply chain challenges for the automotive sector this year. Progressive mentions that Russia’s invasion of Ukraine compounded microchip supply chain issues as both were suppliers of semiconductor raw materials.

Wars lead to worsened shortages and cause ripple effects as trade routes and suppliers will have to pivot. With the ongoing Israel-Gaza war and the looming Iran-Israel conflict, it remains to be seen if these disputes will amplify or have no effect on the automotive industry’s supply chain problems.

There is also a global shortage of technicians and mechanical workers. According to data from Auto Service World, the automotive industry needs at least 642,000 technicians to fill its shortage in the United States alone.

Software company Wrench Way cited several factors affecting the technician shortage in society including the youth’s preference for white-collar jobs over vocational occupations and the perception that the career is “dirty.”

Additionally, Auto Service World said that as the demand for technicians increases so will the skills required to work in the profession as modern automobiles have new software, EV architecture, and even artificial intelligence.

Modern problems brought about by new technologies and innovations will also be in the spotlight this year. With the rise of autonomous driving advancements and vehicle connectivity, cyberattacks on automobiles have become a reality. American telco company AT&T says that keyless car theft, phishing, infotainment attacks, and even remote hacking are the cyber threats automobiles face due to new features.

The automotive industry is navigating a year defined by a blend of promising opportunities and daunting challenges. 2024 promises exciting developments, from the continued rise of electric vehicles to the integration of e-commerce in the car-buying process. With a growing focus on sustainability and technology, car buyers can expect more eco-friendly options and seamless digital experiences when purchasing vehicles.

However, despite these opportunities, challenges including supply chain disruptions, geopolitical tensions, and workforce shortages must be addressed. As the industry looks for solutions to these problems, adaptation, innovation, and collaboration will be essential in charting a course toward a more sustainable and resilient automotive future. — Jomarc Angelo M. Corpuz