Looking back on 2023, the sector experienced a series of transformative events that impacted its trajectory. From technological advancements to global market shifts, here are five pivotal events that defined the automotive landscape in 2023.
Supply Chain Disruptions: The automotive industry faced continued challenges due to supply chain disruptions. Semiconductor shortages continued to cause part shortages, while labor strikes and transportation bottlenecks led to production delays and increased manufacturing costs. Dealerships and agencies we forced to get more creative when it came to messaging and inventory as incentives dried up and Manufacturers had less to offer in ways of marketing.
Increased Prices: Prices skyrocketed across all brands as inventory dried up. Dealerships had the highest grosses we’ve seen in years, and almost as quickly as they rose, with the return of inventory we saw the industry virtually snap back. In Q4 dealerships no longer saw customers willing to spend over MSRP if it meant they got a new car, instead, consumers were looking for the least expensive vehicle, even if the incentives weren’t there to back it up.
The rise of AI: We saw Artificial Intelligence reach new heights and while we don’t have autonomous driving across all vehicles and manufacturers, the technology in vehicles has grown exponentially. AI continues to shake up other aspects of the automotive market as well with marketing efforts heavily influenced by user interactions offers the opportunity for more targeted messaging and increased traffic opportunities.
Global Policy Changes: Governments took steps to address the contribution of vehicles to climate change and promote sustainable solutions. At least 9 states are pursuing plans to ban the sale of ga vehicles before 2040, if not sooner. These policy shifts have begun to influence consumer choices to expedite their transition to cleaner and greener alternatives.
The Rise of Electric Vehicles (EVs): A significant shift in 2023 was the accelerated production of electric vehicles. While increased battery range and stronger charging infrastructure for EVs continue to grow (albeit still slower than many dealerships would like) the overall sales of Electric Vehicles remain a difficult challenge for many dealerships. In some states, the potential ban of combustion engines helps move EVs faster, as well as many major automakers, like Volvo, investing heavily in electric vehicle development, and phasing out traditional internal combustion engines by 2035.
The automotive industry in 2023 was filled with events that forced dealerships to pivot and change course. From the surge in electric vehicle adoption to global supply chain disruptions and advancements in Artificial Intelligence, it’s hard to imagine 2024 could be nearly as eventful. Fortunately, as we head into the new year things feel like they are finally settling out, at least, a little bit.