Emerging 2015 Auto Industry Trends – Surviving Product Mix Turbulence in India

Despite, recent global gains auto marketers brainstorming to navigate their product mix and marketing strategies. The question is WHY and HOW they will do it? Let's take a comprehensive look at auto market trends, challenges, and tentative policies.

Gradually, automotive industry worldwide reached a new paradigm of success. In some regions, the auto industry enjoying a relatively high profitability and growth. Nevertheless, substantial vagueness about the future remains.

The "unevenness of global market" is one of the biggest challenges faced by automakers worldwide. For instance, the U.S auto market proven stable in past decade and executives and experts seem optimistic, forecasting North America's annualized sales. On the other hand, European auto market is weaker as it is surfacing erratically from its six years sales crash. Even, in past few years, Russia, and South America continuously reflected a drop in sales, but now, their sales have plunged optimistically.

At this instant, if we talk about the Indian auto market scenario, then things are bit unpredictable as auto industry expert's found Indian market's performance a bit inconsistent even after substantial investments. This situation appears as a challenge for OEM's (Original Equipment Manufacturers) to predict their future sales growth with utmost certainty.

What is absolute precedence for industry leaders in 2015?
Demand shift is a foremost concerned issue for automakers. According to the auto market expert's, "OEM's can overcome this challenge demand change by responding strategically". Over next years, it is expected auto manufacturing industry will transform substantially, not only able to predict robust sales growth, but also, build appreciable market share and profitability.

Factors causing strategic shift in auto industry

Fundamentally, there are three forces rendering the auto industry – expanded regulatory demands, a change in consumer demand and Proliferation of information and data.

Expanded regulatory demands

It is getting dramatic for OEM's (Original Equipment Manufacturers) to comply with CAFÉ (corporate average fuel economy). This compliance demand higher volume to remunerate growing cost. Officials are also assigning to add more safety-related features (like backup cameras) that add up the cost further.

Shift in consumer demand

A new generation is now started perceiving "cars" more as transportation machine, instead their individual brand preference, as people did in past. However, it is not affecting the sales volume but reflecting a considerable effect on "how much people are willing to pay for automobiles"?

This demand shift is becoming an ever increasing challenge in product mix of auto industry. Consumers are demanding luxury at a reasonable cost. Also, expecting some "lap of luxury" features to be standard.
The proliferation of information and data

Use of telematics systems and sensors became more common among automakers. All automobile industry players keen in gathering more car and customer data, however, uncertainty about how to use this data is prevalent.
Also, easy accessibility to automobile price, quality, discounts and specifications has given great bargain power to consumers.

Emerging trends – capacious opportunities or enormous risks

Increased software content and electronicsr
According to the publication in consumereport.org – infotainment appears to be the biggest niggling feature for the automobile industry in the year 2014. Hence, the strategic response to new trends by auto manufacturers is primarily revolving around "infotainment features" like – telematics. According to strategists, this will assist the industry to increase margins and build a closer relationship with customers.

Time to alter the existing product mix pla

CAFÉ (corporate average fuel economy) standards are becoming stringent globally, demanding a substantial reduction in overall fleet emissions. This and other such standards are keeps on adding automaker's cost. The tighter standards act as an add-on challenge for automobile industry along growing issues of emerging electronic content and consumer demand shift.

Therefore, automakers must navigate their current product mix strategies to a more robust platform to deal simultaneously with three above mentioned challenges in best efficient manner.

The altering appearance of retail

Besides growing software content and rigorous regulatory standards, the auto industry is also struggling with a lack of robust dealership network, that in future may act as the competitive disadvantage for automakers. To accommodate the shifting buying behavior of "new generation consumers" demands investment in new technology at every part of sales chain.

To overcome the challenges mentioned above auto industry is now undergoing some major transitions. According to expert's analysis, automakers not only needed to shift their strategies but also must work progressively to devise better product mix, product differentiation, and infotainment strategies.