What does 2022 look like for auto industry?

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What does 2022 look like for auto industry?

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 What does 2022 look like for auto industry?
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Highlights

  • The global auto industry could potentially improve next year, driven by further recovery in demand and gradual easing of supply chain challenges.
  • The growing concerns for increased air pollution and reduced levels of fossil fuel reserves have boosted the demand for electric vehicles, now considered as the future of automobiles.
  • The automotive industry is largely integrating artificial intelligence technologies in areas such as self-driving vehicles, driver assistance to improve safety, and fleet management.

The global auto industry has undeniably been on a rocky road over the past two years, experiencing the COVID-19 induced disruptions and supply chain challenges. In response, several auto manufacturers have adopted best practices and strategies to mitigate risks, address shortages and avoid revenue losses.

As we enter 2022, all automotive stakeholders are looking for positive news. According to Fitch Ratings, the global auto industry could potentially improve next year, driven by further recovery in demand and gradual easing of supply chain challenges. The rating agency has highlighted that the availability of semiconductors would increase moderately on a sequential basis through 2022. However, supply chains are vulnerable to potential risks due to the pandemic.

ALSO READ: How global chip shortage is denting auto production plans

Amidst many factors continuing to impact the way vehicles are powered, driven, and acquired, disruptions transforming the industry can be witnessed across each stage of the value chain in the upcoming year. Let us look at few trends shaping the auto industry in 2022:

Electrification

The growing concerns for increased air pollution and reduced levels of fossil fuel reserves have boosted the demand for electric vehicles, now looked upon as the future of automobiles. The transformation is significantly backed by governments across the world, pledging to achieve net zero emissions. We saw improved battery technology, better charging infrastructure and greater EV adoption in 2021, with the trend expected to continue in the upcoming year.

Electric Vehicles

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ALSO READ: What are the hurdles in buying an electric car now?

Automotive Digital Retail

The pandemic has brought one of the critical shifts in the automotive markets as consumers shifted from showrooms to online platforms for purchasing products, even high-priced items such as cars. Undeniably, the online marketplace is convenient and more price competitive than physical showrooms. Moreover, the marketers use technological innovations to bridge the gap between the showroom and online car purchase experience.

ALSO READ: Australian Automotive Industry Back On Track As Vehicle Sales Pick Up

Artificial intelligence

Artificial Intelligence (AI) technologies are being largely integrated by the automotive industry, with these smart technologies massively transforming the way vehicles function. AI is fuelling self-driving vehicles, assisting drivers to improve safety, managing fleet, etc. The fleet of autonomous vehicles is growing, aimed at reducing last-mile deliveries, ensuring safer public transportation, and reducing downtime.

Growing need for personal mobility modes

The fear of catching the COVID-19 infection has led people to ditch public transportation in favour of personal vehicles. As the pandemic scenario still lays uncertain amidst the Omicron variant concerns, the trend towards purchase of personal cars is expected to continue in several markets.

ALSO READ: Do emission regulations signal end of IC engine vehicles?

Increasing stringent emission regulations together with rapid EV growth and continued automated vehicle developments are expected to chart the trajectory of the automotive industry in 2022. However, the growth and movement of the automotive industry in 2022 would be largely dependent on the pandemic scenario, which poses potential risks to supply chain and purchase decisions.

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