The car industry is experiencing a bit of downtime and experts say it isn’t going to end soon. It’s not only in the US –the global auto market has been facing a significant decrease in sales.
The risk in auto sales is continuously elevating and no one can predict when it’s going to end or how high the risk would reach. As a result, some companies are on the verge of cutting production. That means, there be a lot without jobs too.
To understand why this is happening, let’s first focus on the factors that play a major role in the global auto market:
Dwindling Demand
In the past years, global car sales experienced strong growth but not until recently. Just last year, the industry has experienced a plateau in sales and now we are experiencing a decrease in sales.
One of the biggest market when it comes to the car industry is the China market. But unlike in the past years, most buyers in China are buying electric vehicles. It is estimated that 60 percent of the total sales of electric cars is due to China. The number is expected to increase up to 6.4 million in the coming years.
Tighter Hold On Car Emission
It’s great that people are taking notice of the effects of carbon emission on the environment. Continuous efforts of the different governments are resulting in more strict laws when it comes to exhaustion.
What we are feeling today is just the beginning. Expect tighter requirements and bigger fines in case manufacturers break those requirements soon.
Going Electric Isn’t That Easy
For manufacturers to stay afloat, they have to cope by releasing electric vehicles. Simple as it sounds, there are still a lot of challenges towards that route.
The manufacturers themselves are not yet prepared to produce electric cars. This change to electric cars also means additional investment for manufacturers, which not all of them can easily obtain.
Apart from the manufacturers, the market itself isn’t quite ready for the shift to electric cars. Although there is an incredible rise in the buyers of electric cars in the past year, that still accounts for a tiny fraction as compared to the total cars sold.
Also, infrastructures along the road that support electric vehicles should be supplied. This is currently lacking in the US as well as in Europe but China is making great progress.
Consumer Preference On Owning Vehicles
Ridesharing is a very welcomed thought nowadays. Many prefer to go for it because they can save on travel cost. They won’t even have to go out of their way to find cheap insurance for their cars. Although ridesharing is not as comfortable as owning your vehicle and there are limitations, many have learned to look past that.
Manufacturers also can’t ignore the emerging technologies about cars. There is a chance for driverless cars to go mainstream in the future. If this is the case, it is also highly possible for people to choose to rent rather than own cars.
Final Words
As technology develops, change comes with it. Although its a difficult time for all of us in the car industry community, there is nothing else that can be done than cope up with the times and look ahead.
