i3 - November/December 2020 - 18

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NOVEMBER/DECEMBER 2020

i3_1120_16-19_Feature_PandemicEffectsAutoIndustry.indd 18

Left to Right: Courtesy of Nissan, Courtesy of Lucid Motors.

spread. According to a July Deloitte Consulting LLP study, 37% of respondents
Charlie Chesbrough, senior economist
delayed large purchases, 47% planned to keep their current vehicles longer,
at Cox Automotive.
and 56% planned to limit their use of public transit for three months.
Yet regardless of demand, the supply of
But none of this is hindering the long-term trend of MaaS displacing
vehicles on dealer lots was constrained,
personal vehicle ownership among Millennials, says Joe Vitale, principal
and the usual rollover to the next model
and global automotive sector leader at the firm. "I don't think that mass
year in September was delayed,
transportation, micro-transportation, shared vehicles or ride-hailing is
Chesbrough says. In August, model year
dead by any stretch of the imagination," he proclaims.
2021 vehicles were only 0.5% of dealer
More, "we're starting to see more willingness to pay for alternative powinventory, Cox data show. By comparison,
ertrains like electric vehicles," Vitale adds. "Consumers are on board with
model year 2020 vehicles were 8% of
the electrification wave and COVID-19 will accelerate this movement." The
dealer inventory at the same time last
virus response has motivated consumers to embrace giving back to society
year. "It's a situation where the recovery
and "electrification is a way of doing that," he says.
may be held back not by consumers not
With the downturn in auto sales came increased reliance on digital pathwanting to buy, but the industry unable
ways to reach consumers who stopped going to dealerships or to auto shows
to get them vehicles to buy," he says.
which were canceled. This was a stimulus to improve Web-based configuraChesbrough also sees automakers delaytors that spurred remote and coning work on self-driving cars while they
tactless purchases, and a new
focus on getting their businesses in order.
emphasis on online car launches.
And although he remains skeptical that
"The digital production values
EVs will be widely successful with U.S.
have climbed by a lot of companies
consumers, he concedes the launch of eleclearning to deal with this new way of
tric pickup trucks will be a test because of
relating" to a changed world, says
the segment's market dominance.
James Hodgson, principal analyst in
Another problem for EVs is the busithe smart mobility and automotive
ness model, Chesbrough contends.
practice at ABI Research.
Automakers are "asking people to buy
Hodgson adds, "when I'm speaking
into a technology which is evolving by
to various [automakers], suppliers or
the day" with a commodity that will be
MaaS operators and trying to get an idea of what they're expect- The automotive
kept and used for 10 years or longer. "So,
industry is
ing consumers to do, there's a lot of conjecture but no-one really
[industry is] asking consumers to absorb
increasingly
is sure" what to expect from "rational consumers" as the crisis
all of the technology risk of these vehiusing digital
goes on. "It's very difficult to predict what consumers are going media to reach
cles if they buy them, and whatever
consumers.
to do when decisions aren't being born of a cool head."
evolves from there," he says. A solution
to this EV conundrum will be new
financing schemes, Chesbrough proAUTOMAKERS' PERSPECTIVES
poses, "but I question what are those
For many automakers, swift sales declines led to better use of data and digital
residual values" for a vehicle that's techplatforms to spur consumer interest - in some cases speeding up changes
nologically obsolete.
that were already underway.
"One of the questions that the industry
"COVID-19 was a catalyst for automotive manufacturers to accelerate
is wrestling with is complexity," given all
plans that were in place," says Allyson Witherspoon, vice president of marketthe variants of each car model produced
ing communications and media at Nissan North America Inc. The first reactoday, Chesbrough says. In the wake of
tion at Nissan, she says, was to "try to understand what people need when it
the pandemic, "it seems like it's going to
comes to mobility and how can we serve that." Thus, the next step was to
be a natural thing for the industry to
study consumer conversations in social media and search trends, "and
get rid of this complexity," conthen try to use that to help develop what our communication plans
centrate on its mainstay
were going to be." As lockdowns were eased, "we were looking at
"We expect a
products and get itself
mobility data," she says, to decipher "what were the different
"smaller and more effilevers we could pull" to entice customers to car shop again.
cient," he asserts.
"It became clear that there was more comfort level in doing
To be sure, consumers
shopping activity at home," she recalls, and this necessitated
of electric vehicles
have delayed buying new
bringing the shopping experience to consumers. Nissan
in the wake of
cars, there is apprehension
already had plans before the pandemic to beef up its e-comabout using public transit,
merce presence, but it accelerated its rollout timetable by six
COVID-19."
and migration out of cities
months and accomplished in two weeks what it set out to do:
-Roger Lanctot,
Strategy Analytics
accelerated with COVID-19's
reorganize the shopping tools and remake the online
I T I S I N N O VAT I O N

10/20/20 10:15 AM

https://www.coxautoinc.com/ https://www.nissanusa.com/

i3 - November/December 2020

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