Trends and Predictions in the Motor Industry for 2021

Published on 25 January 2021

The Coronavirus pandemic has dealt a severe blow to the global economy, and the motor industry hasn’t emerged unscathed. While its recovery is expected to start this year in 2021, the road back won't be simple. Not only have car sales plummeted, but supply chains have also been broken. Many companies will have to rethink their business models.

Because of this, new trends are emerging for the motor industry.

Car Sales Will Rise Moderately

During the first six months of 2020, sales of new passenger cars and light commercial vehicles dropped by 34%, according to the Bank of Ireland. In October sales were up, but so far this year the number of new car registrations has fallen by 25.5%, according to the Society of the Irish Motor Industry. However, car sales are expected to rise two figures in 2021, although it will take a few years before the pre-COVID demand is recovered.

This increase in sales will be driven by a change in our perception of mobility, as more people will now view having a car of their own as preferential over public transport. However, there is an increased concern among some consumers about the possibility of a prolonged recession and what that might mean for them.

Translating these consumer sentiments into actual sales will be a challenge for the motor industry, as many customers are likely to turn to the second-hand vehicle market. However, pre-owned vehicles and the more affordable segments could see an increase in demand throughout 2021.

The Car Sales Process Will Become Increasingly Digital

Even if the pandemic is brought under control in 2021, companies in the automotive sector will need to rethink their business models to adapt to new demands and consumer expectations. The virus has amplified and accelerated existing trends, such as the use of digital technologies to access and consume goods and services. This trend could extend to larger purchases, such as cars.

At the moment, one in four consumers are already interested in buying a car online, according to a report by Deloitte. In the short term, the challenge for companies to make the online sales process even easier. This involves offering both the option to book a test drive online, as well as the option to have the car delivered to the customer’s home.

As new technology solutions are integrated, the sales process will become increasingly digital. Some dealerships, for example, already use virtual reality glasses to help customers choose the colour and the details of the interior of the car. In the coming years, Augmented Reality and holograms will make it possible to create driving simulations on different terrains that are so real that it will not be necessary for customers to test the car or leave the house to buy it.

The Electric Car Will Continue to Gain Ground

The electric car will continue to gain a strong foothold this year. In fact, the registration of new electric cars in the European Union increased by 3.7% during the first quarter of 2020, according to data from Bank of Ireland. As well as that, the majority of European countries are expected to continue to pursue their commitment to sustainable mobility. State aid and subsidies to help people switch from internal combustion engine cars to electric or low-emission models, the existence of a strong network of national charging stations, and increasingly restrictive emissions legislation will continue to drive this technology. 

There are other factors that play in favour of the electric car. Next year, for example, the selection of available electric vehicles will include more than 200 models, including hybrids, micro-hybrids and plug-in hybrids, so drivers will have even more options to choose from.

Connectivity Will be Increasingly Present in Cars

Connectivity will continue to be further developed in cars. The new models will come equipped with more alerts and driver assistance systems than before, and as V2V (vehicle-to-vehicle) technology and 5G begin to spread, cars will also be more connected to each other and to the environment.

There are other advantages to connected cars also, like receiving valuable information about distances to tolls and service stations, delays or accidents on the road and being able to adjust speed and routes in the event of a traffic jam.


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