The auto industry is undergoing massive changes, which we can expect to take shape even further over the next year. From self-driving cars to the rise in EV technology and more, what will the future bring? Well, while we can't predict where we'll be a decade from now, if we're looking at the next 12 months, we can safely assume some trends will emerge. Take a look at some of the top auto industry trends we can anticipate seeing continue – or enter – the industry in 2023.
Take a glimpse in the rearview mirror to a mere decade ago and we may have never expected so many vehicles to become the internet of things (IoT) devices in their own right. Many newer models boast capabilities such as Wi-Fi to passengers and a plethora of other advantages that only the internet can supply. Through this connectivity, vehicle users are able to share data (such as diagnostics) with mechanics, car dealerships and other relevant parties. These features not only provide a better driving experience, but they can also save car owners potentially hundreds of dollars in unpredicted or unnecessary repairs.
More connections open up the possibility that vehicles will be prepped and ready to become autonomous in the near future. According to a 2020 International Data Corporation (IDC) forecast, the number of vehicles capable of at least Level 1 autonomy will grow to 54.2 million units in 2024 at a compound annual growth rate (CAGR) of 11.5%. Level 1 autonomous vehicles include features that can assist them with driving, parking and other applications – depending on the situation – while the driver remains in control.
According to IBIS World, 2022 saw a 2.1% increase in used car dealerships in the United States – an increase to almost 140,000. Those dealerships saw a 4.1% employment growth as well. Why are pre-owned vehicles so tempting to prospective car owners? Used cars, especially those still within 5 years of their manufacturing date, have all the technologies that their more recently produced counterparts have, save just a few advancements. So, onboard GPS, Bluetooth, rear-view cameras and more can all be attained for a much lower price.
The used car market was hit much less by supply issues in the previous years, which kept costs much lower than new cars. The average cost of a new vehicle rose by 42.5% between 2020 and 2022, according to insights from J.P. Morgan, and it's expected to remain high. Pre-owned vehicle prices, on the other hand, while they did see a jump in demand that fueled prices up temporarily, have likely plateaued. The price of used vehicles will fall by as much as 20% in 2023.
Shared mobility refers to any service that enables people to access transportation without owning a car. This includes public transit, car-sharing services like Zipcar and Car2Go, ride-sharing apps like Uber and Lyft, bike-sharing such as CitiBike in New York City and scooter-sharing programs like Bird in cities like Los Angeles.
Although it may take more than a year to truly see a noticeable decrease in the number of cars on the road, 2023 will likely see shared mobility making an impact. This method of transportation removes the need for car ownership. Instead, two or more people – who could be strangers to one another) share one vehicle and its costs. With the high cost of owning a vehicle, 2023 may be the year that mobility as a service (MaaS) will truly come to the fore.
Marketwatch predicts that the global shared mobility market size is projected to reach $145,460 million by 2028, from $90,690 million in 2022, at a CAGR of 6.5% during 2023-2028. As these companies begin to compete for market share, the amount of advertising we'll see in 2023 and beyond is going to increase, which may fuel its expansion even further.
The automotive industry is poised to explode as advanced technology becomes mainstream and new, innovative ways of transportation begin to take form. We can't wait to see where 2023 will take the sector from an engineering perspective and beyond.
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