Betekintés: The Future in Motion, Automotive Current and Future Trends, White Paper

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Source: http://www.doksi.net

THE FUTURE
IN MOTION
Automotive Current
& Future Trends
White Paper

Source: http://www.doksi.net

OVERVIEW

WHAT’S HAPPENING NOW?

WHAT’S NEXT?

The global automotive market is experiencing a number of disruptions
that influence consumer, retail, and services strategies including
hybrid/ electric cars, autonomous vehicles, decreased car ownership
in younger urban consumers, car/ ride-sharing, and environmental
and sustainability concerns.
The Australian automotive market, estimated at $62.8 billion in revenuei
is facing domestic changes to government subsidies and tariffs, in
addition to shifts in consumer behaviours and preferences, including
younger Australians foregoing their driver’s licence;

THE DISRUPTED FUTURE

ABOUT ACRS

the number of under 25-year-olds in
Victoria without a licence increased
from 10% to 35% in the last ten years.ii
While new technologies and competitors such as Uber and Tesla
are transforming the automotive industry, they also present new
opportunities.
Considering these disruptions and the rapid advancement of technology,
ACRS has prepared this white paper to address current trends and the
future of the Australian automotive industry.

Source: http://www.doksi.net

OVERVIEW

WHAT’S HAPPENING NOW?

WHAT’S NEXT?

THE DISRUPTED FUTURE

ABOUT ACRS

WHAT’S HAPPENING NOW?
Consumer Decision Making
The purchase and upkeep of a car is a significant consumer

sold in 2017, representing 18.5% of the total amount of

decision as it represents 5% of average annual household

vehicles sold.iv

expenditure or $77 per week.iii
The ACCC identifies three types of costs consumers
consider when purchasing a new car:
yy purchasing costs (i.e. the price of a car);
yy running costs (i.e. petrol, registration); and
yy depreciation costs (i.e. sale price after use).iii

These are compared to the relative tangible and intangible
benefits a consumer gains when purchasing a particular

Consumers are becoming increasingly informed on car
models before purchasing;

55% of consumers spend
between one to four weeks
researching brands and
models to identify cars of
interest.iii

Audi presented the Audi VR experience for the first time at the North American International
Auto Show in Detroit, early 2015. At a car dealership, a sales advisor can configure any Audi
model in the device so that customers can virtually experience their dream vehicle.

model, such as status and lifestyle. Other considerations

There are two critical touchpoints during the information

to research models while at dealerships.v In response,

for consumers when purchasing a car include city type,

search phase;

dealerships are incorporating more digital aspects into

where population density, parking availability, and public

yy the physical dealership, and

physical spaces. For example, Audi launched its virtual reality

transportation infrastructure influences the need for a car.

yy online resources.

(VR) showroom in August 2017, integrating it into consumer

For example, in cities like Canberra, where there is little

The physical dealership (particularly information from

experience.vi Dealers can present the complete range of

public transport infrastructure and residential areas are

salespeople) influences consumers’ decisions, with

models to consumers, including add-ons and customisation

spread over a wide area, cars will remain a necessary part

consumers typically visiting two dealers before purchasing

options. The experience encompasses an entire 360-degree

of life. However, inner-city areas of Melbourne may rely less

a car.iii Online (desktop and mobile) is the second critical

view of the vehicle, sound effects, lighting, and the ability

on vehicles due to heavy traffic, expensive car ownership,

touchpoint, with 65% of consumers using manufacturer

to explore the interior and mechanics. The VR showroom

and readily available public transport. These considerations

websites to source information before purchasing a car.iii

is currently available in the United Kingdom, Germany, and

are reflected in the high volume of small passenger vehicles

Fifty per cent of consumers also use their mobile phone

Spain, with Australia expected to follow suit.

Source: http://www.doksi.net

OVERVIEW

WHAT’S HAPPENING NOW?

WHAT’S NEXT?

THE DISRUPTED FUTURE

ABOUT ACRS

Sharing Economy
In the past many consumers had to forego experiences

Regardless, higher usage of vehicles will result in greater

The Netherlands and Norwegian governments will ban the

and products they could not afford due to the high initial

wear-and-tear, changing what consumers require from a car

sale of new petrol- and diesel-operating cars by 2025. The

purchasing price and ongoing ownership costs, such as

– fuel-efficiency and high durability (including the potential

United Kingdom and France have committed to banning the

maintenance. However, this is shifting over recent years

to update the car as new technologies are released).

sale of petrol- and diesel-operating cars by 2040.

Electric Cars

Electric cars are becoming more affordable for consumers

with companies providing access to experiences and
products without the exorbitant cost of ownership – this
phenomenon is known as the sharing economy. For

Environmental and product sustainability concerns have

example, Airbnb provides consumers with the opportunity

been on society’s radar for some years. Companies such

to experience living a different lifestyle – whether this is

as Starbucks and H&M are incorporating sustainability

the high-life in a luxury apartment or experiencing the

into their core principles, ensuring their operations and

day-to-day life of residents.

products have little to no impact on the environment.

The automotive industry has also felt the impact of the
sharing economy, with companies such as Ford and
Mercedes-Benz opening car-sharing services across
Europe.vii While the initial thought is that there may be a
decline in car sales, it is not necessarily the case – the
individual purchasing the car may instead change. For
example, car rental providers such as Hertz may purchase
more cars to fulfil demand, while individual consumers
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may buy a vehicle for ride-sharing service use rather than
household use.

The automotive industry has also recognised the need to
produce sustainable vehicles with minimal environmental
impact, resulting in the development of electric and other
fuel-efficient models.

Electric cars are the way
of the future, with many
countries implementing
policies and infrastructure
to support their adoption.

internationally – the latest Tesla Model 3 can be purchased
for upwards of AUD 45,000. However, electric vehicle
accessibility in Australia is limited, with 13 of the 16 models
available in 2016 costing upwards of AUD 60,000, and the
remaining three restricted by stock levels, specific purchase
arrangements, and availability timeframe.viii Despite this,
a number of institutions such as the CSIRO, Australian
National University, and the Department of the Environment
and Energy predict that the adoption of electric vehicles in
Australia is to increase significantly by 2030, assisted by
the increasing number of models available on the market.viii
This is supported by a 2016 survey of Victorians that
indicated 50% would consider purchasing an electric car,
with price and lack of infrastructure identified as key barriers
to purchasing.viii Results were similar in a study of electric
car adoption in Queensland.ix

Source: http://www.doksi.net

OVERVIEW

WHAT’S HAPPENING NOW?

WHAT’S NEXT?

THE DISRUPTED FUTURE

ABOUT ACRS

Key to the adoption of electric cars in Australia is the

Technology is advancing rapidly, with new models outclassing

engine into the car, Snap uses a removable ‘skateboard’

availability of infrastructure such as charging stations.

existing models sometimes within a year or two. Electric

engine which can be updated with new technology as

In October 2017, NRMA (NSW’s primary road user group)

vehicles, in particular, are seeing rapid advancements,

necessary. The concept considers additional concerns

announced an additional 40 electric fast-charging stations

resulting in second-hand electric vehicles retaining less of

such as autonomous vehicles, ride-sharing, and productive

to be built across the state, bringing the total number to 61

their original value than the traditional model.xiv

interiors through the use of a separate passenger pod that

in NSW, and 90 stations across Australia. Total charging

Manufacturers will need to consider how they will adjust

may be owned, leased, or shared while the engine remains

stations (including fast-charging and regular charging)

designs to account for these rapid changes, as it may be

for public use.

in 2017 numbered 476 across Australia, with most being

difficult for consumers to purchase new models as they

concentrated in capital cities, though more will be built in

are made.

regional areas.viii

Electric cars also present a tremendous opportunity for
Australian manufacturers. NRMA estimates that electric

Some manufacturers such as Rinspeed have considered

vehicle battery manufacturing will become a $240 billion

Regulation of electric vehicles may also assist adoption,

this, creating a concept car called Snap that addresses the

industry within 20-years, an industry that Australia is well-

although Australia has been slow to develop incentives

shortening lifespan of vehicles.xv Rather than building the

positioned to enter with its abundance of essential minerals.xvi

to purchase. At the time of publishing, the only incentives
offered for electric vehicles were the luxury car tax break
and stamp duty exemption in the ACT.xi
However, the luxury car tax would still capture most models
available on the market, with consumers paying a 33% tax
on fuel-efficient cars priced above the threshold.xii Other
countries offer significantly higher incentives for switching to
an electric vehicle, with the United States providing a federal
tax credit of up to $7,500, in addition to rebates and tax
credits offered by state governments.xiii

Tesla Model 3 – smaller, simpler and more
affordable, and the world’s first mass-market
electric vehicle.

Source: http://www.doksi.net

OVERVIEW

WHAT’S HAPPENING NOW?

WHAT’S NEXT?

3D Printing

Autonomous Driving

Like other technologies, 3D printing has become cheaper

Autonomous driving technology is being tested around

and more accessible over the past few years. Retailers

the globe, and Australia is no different. Major brands such

are beginning to incorporate 3D printing into product

as Mercedes-Benz have completed tests in Sydney and

prototyping and beyond, offering consumers high-levels of

Melbourne, and passenger trials for autonomous buses

personalisation. A number of industries are exploring the

commenced in Perth in early 2017. A recent study ranked

potential to 3D print spare parts, the automotive industry

Australia 14th overall in autonomous driving preparedness,

included. For example, in early 2017 Ford introduced a

with our laws, lack of technology and innovation, and

3D printing system into its Dearborn, Michigan, research

general consumer scepticism regarding autonomous

and innovation centre. With the increasing affordability of

vehicles as areas to improve.xvii Currently, Australian

3D printing and use of light-weight materials, Ford hopes

laws require a human to be the driver of all vehicles

to cut costs and improve fuel-efficiency in all its vehicles.

and take responsibility for incidents that occur, limiting

3D printing can also be used to test prototypes, allowing

the opportunities for autonomous vehicles.

changes before the part is sent into mass production.

Ford’s fully autonomous Fusion Hybrid research
vehicle on the streets of Dearborn, Michigan, USA

Ford is currently exploring potential applications
of large-scale 3D printing for future production
vehicles and personalised car parts

THE DISRUPTED FUTURE

ABOUT ACRS

Mercedes-Benz autonomous concept car at IAA 2015, Frankfurt, Germany

Source: http://www.doksi.net

OVERVIEW

WHAT’S HAPPENING NOW?

WHAT’S NEXT?

THE DISRUPTED FUTURE

ABOUT ACRS

WHAT’S NEXT?
Productive Interiors

Health and Wellness

Flying Cars?

Car manufacturers based in China are rethinking the idea

Even the automotive industry is unable to escape from the
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A Slovakian start-up is blurring the lines between car and

of the car. Byton, a start-up based in China, has created a

health and wellness trend, with Nissan creating a concept

plane with the AeroMobil, the world’s first flying car. The

self-driving concept car that aims to act more like a luxury

car that tracks hydration of the driver. The seats and steering

vehicle makes a smooth three-minute transition between

leisure space than a vehicle, including revolving front seats

wheel are fitted with a special material that responds to

land and air and can travel up to 750kms by air at 75% of its

and digital capabilities.xviii Rather than a regular dashboard,

sweat, changing colour from blue to yellow, with blue

speed capacity.xxi Drivers will require a pilot’s license to fly

the car has a wide gesture-controlled digital screen that

signalling well-hydrated and yellow signalling dehydrated.xx

the vehicle. The company is currently taking pre-orders, with

provides entertainment and connectedness. Other brands
such as ClearMotion are exploring the possibilities of
productive interiors by utilising technology, while Uber filed
a patent for a sensory simulation system to make the car

While this concept is a one-off for Nissan to raise awareness
of dehydration while driving, there are other companies such
as Byton looking to implement health tracking technology as
a standard feature in their cars.

ride more comfortable and productive by reducing motion
sickness and light interference.xix
Aeromobil’s unique combination of car and
aeroplane is expected to be in full production
by 2020.

Byton’s autonomous, electric concept car aims
to bridge the gap between tradition and vision
by blending bespoke lounge experience with
digital provisions.

the vehicle expected to be in full production by 2020.

Source: http://www.doksi.net

OVERVIEW

WHAT’S HAPPENING NOW?

WHAT’S NEXT?

THE DISRUPTED FUTURE

ABOUT ACRS

THE DISRUPTED FUTURE
Disruption is becoming the status quo. Once unchanging

constantly innovating to stay ahead in the increasingly

insights that inform business decisions. In conjunction with

industries are now faced with a range of new technologies

competitive automotive industry.

the Monash Business Behavioural Lab, ACRS can offer

and innovation that are accelerating the global market
into the future. Trends that in the past may have evolved
separately are now converging – electric cars, autonomous
vehicles, and the changing way people view car ownership
are prime examples of this evolution. It is no longer enough
to keep up with the market – manufacturers need to be

ACRS offers a range of research services to uncover
opportunities in a rapidly changing market. As part of the
Monash Business School’s Department of Marketing, we
have access to and experience with a range of research
methods and technologies designed to extract actionable

a number of research methods and technologies such as
testing vehicle interiors with our eye-tracking capabilities
to determine what stimulates a consumer, performing
segmentation analysis to provide a detailed understanding
of the Australian market and test virtual reality showrooms.

Source: http://www.doksi.net

OVERVIEW

WHAT’S HAPPENING NOW?

WHAT’S NEXT?

THE DISRUPTED FUTURE

ABOUT ACRS

ABOUT ACRS
The Australian Consumer, Retail, and Services (ACRS) Research
Unit assists retail and services organisations seeking to better
understand consumers, traverse global trends, identify bestpractice, or employ marketing as a source of competitive advantage.

DR REBECCA DARE

Positioned within the Monash Business School’s Department of

Managing Director

Marketing, ACRS has a 35-year history as a globally respected
source of retail, services, consumer and marketing knowledge.
ACRS combines the latest academic research advances with
business relevance, practicality, and strategy.

Department of Marketing
Monash Business School
Monash University
Level 6, Building S
26 Sir John Monash Drive
Caulfield East, VIC 3143

DR ELOISE ZAPPOS

PAULA DE AMICIS

STEPHANIE ATTO

Senior Research Consultant

Senior Designer &
Research Consultant

Senior Research Consultant

PAOLO DE LEON

CLARICE HUSTON

JACK PAGET

Corporate Partnership
& Research Consultant

Corporate Partnership
& Research Assistant

Research Analyst

TELEPHONE
+61 3 9903 2869
EMAIL
acrs@monash.edu
monash.edu/acrs

Source: http://www.doksi.net

NOTES
i.

James Thomson, “IBISWorld Industry Report G3911: Motor Vehicle Dealers in Australia”, IBISWorld.com.au, accessed January 31, 2018. http://www.ibisworld.com.au

ii.

NRMA, The Future of Car Ownership, accessed February 12, 2018. https://www.mynrma.com.au/-/media/documents/reports-and-subs/the-future-of-car-ownership.pdf?la=en

iii.

Australian Competition and Consumer Commission, New Car Retailing Industry: A market study by the ACCC (Canberra, 2017).

iv.

Ben Selwyn, News & Views, 2017 Australian New Vehicles Sales Year in Review (blog), posted January 16, 2018, accessed February 5, 2018, http://www.acaresearch.com.au/australian-market-research-blog/2017-australian-new-vehicles-sales-year-in-review

v.

Richard Wolstenholme, Consumers Take the Wheel: How Digital is Changing the Australian Automotive Industry, accessed February 13, 2018. https://www.thinkwithgoogle.com/intl/en-aunz/consumer-insights/consumers-take-the-wheel-how-digital-is-changing-the-australian-auto-industry/

vi.

“Audi launches virtual reality technology in dealerships”, audi-mediacenter.com, accessed February 2, 2018. https://www.audi-mediacenter.com/en/press-releases/audi-launches-virtual-reality-technology-in-dealerships-9270

vii.

“The Car Sharing Economy”, just-auto.com, accessed February 7, 2018. https://www.just-auto.com/analysis/the-car-sharing-economy_id176400.aspx

viii.

ClimateWorks, The State of Electric Vehicles in Australia, accessed January 31, 2018, (Melbourne, 2017). https://climateworksaustralia.org/sites/default/files/documents/publications/state_of_evs_final.pdf

ix.

Ergon, Queensland Household Energy Survey 2016, accessed February 1, 2018 (2017). https://www.ergon.com.au/__data/assets/pdf_file/0005/426677/QHES-2016-Summary-Presentation-FINAL.pdf
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x.

Siobhan Fogarty, “Electric car charging stations power up in NSW with NRMA set to add 40 around the state.” ABC News, October 20, 2017, http://www.abc.net.au/news/2017-10-20/investment-in-more-electric-car-charging-stations-around-nsw/9068906

xi.

“Incentives”, Tesla.com/en_AU, accessed February 1, 2018. https://www.tesla.com/en_AU/support/incentives

xii.

“Luxury car tax rate and thresholds”, ATO.gov.au, accessed February 1, 2018. https://www.ato.gov.au/rates/luxury-car-tax-rate-and-thresholds/

xiii.

“State efforts to promote hybrid and electric vehicles”, NCSL.org, accessed February 1, 2018. http://www.ncsl.org/research/energy/state-electric-vehicle-incentives-state-chart.aspx

xiv.

Kathryn Diss, “The big problem with electric vehicle resale prices compared to petrol, diesel and hybrid cars”, ABC News, February 6, 2018, http://www.abc.net.au/news/2018-02-06/electric-vehicle-resale-price-compared-to-petrol-diesel-hybrid/9380186

xv.

“Future-proof car features separating body & chassis”, Stylus.com, accessed January 31, 2018. https://www.stylus.com/yshqsz

xvi.

NMRA, The Future is Electric, accessed February 1, 2018. https://www.mynrma.com.au/-/media/the-future-is-electric.pdf?la=en

xvii.

KPMG, Autonomous Vehicles Readiness Index, accessed 1 February, 2018. https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2018/01/avri.pdf

xviii. “Concept”, Byton.com, accessed January 31, 2018. https://www.byton.com/
xix.

“Turning car interiors into spaces of productivity”, LSNGlobal.com, accessed January 31, 2018. https://www.lsnglobal.com/

xx.

“Nissan creates sweat-sensitive car”, Stylus.com, accessed January 31, 2018. https://www.stylus.com/jpfzpf

xxi.

“Flying Car”, AeroMobil.com, accessed February 1, 2018. https://www.aeromobil.com/flying-car/

Published by
The insight in this white paper was correct at the time of publication (February 2018).