The rising popularity of the populist sentiment, embodied by the recent events in the United States, signals the beginning of a period of turbulence for firms operating in the automotive market. Government’s policies have made it clear that regulations and trade policies are now open to discussion and even removal. Protectionism is on the rise, with populist leaders declaring their intent to return jobs and operations to their countries, especially regarding automobile companies and their manufacturing bases. The government’s aim to review and change existing trade and regulatory policies to fit its strategic economic goals may decline the growth of the US automotive market in the near future.
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Top Trends in the US Automotive Market
New fuel efficiency standards
The new fuel efficiency standards are being targeted by the US government. In a meeting with the automakers, the government made its intention clear to modify car efficiency standards mandated by the previous administration to reduce the perceived regulatory burden. Such efficiency standards can threaten almost one million jobs in the automotive market. However, a few analysts believe that lowering emission targets may help companies in the automotive sector to sell more light trucks, which forms a major part of domestic car sales for the manufacturers. Such changes will certainly add to the complexity of the regulatory environment, leading to additional operational costs, and impact US vehicle sales.
Revised tax policy
Companies in the US automotive sector may benefit from the favorable tax policies that lower corporate taxes and provide incentives to ensure large investments do not move offshore to competitor markets. The administration’s commitment to bring car manufacturing jobs back to the US and ensure large investments are made within its borders will aid in the growth of the industry. Due to this, major companies will now reconsider investing in American states considering it as a possible strategic opportunity.
The safety-critical nature of autonomous vehicle technology and costly nature of autonomous vehicle maintenance systems may push consumers away from independent car services and towards the OEMs themselves. Moreover, OEMs can use the car’s ability to make recommendations to consumers to nudge them towards OEM-approved service centers and replacement parts. A process for certifying equipment and service providers by evaluating their supply chains and pushing these services online may further assist consumers looking to save money by buying third-party components.
Inability to identify the latest trends in the US automotive market can reduce companies’ global automotive industry market share. Stay a step ahead by requesting a free demo of our procurement platform and gain exclusive insights regarding the global automotive market size.
IoT and AI Technologies
IoT and AI Technologies may continue to revolutionize companies in the US automotive market. These technologies may unleash unprecedented transformations across vehicle and device connectivity. Autonomous driving, electric powertrains, and shared mobility may make the driving experience safer, more productive, and less fraught for consumers while addressing concerns about privacy.