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Auto sector faces evolution in buying behaviour, technology, says Deloitte’s Kilpatrick

29th January 2014

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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The automotive industry is facing a fast-moving evolution, says Bronwyn Kilpatrick, who heads up the automotive sector at Deloitte.

The concept of mobility is changing rapidly, and no longer necessarily means someone owns, or wants to own a vehicle.

“How will people buy mobility going forward?” she asks.

What if commuters move increasingly towards car-sharing, or renting vehicles – such as electric vehicles (EVs) – per short trip from a central point, as is happening around the globe’s largest, most advanced cities? How would one cover the risk? Finance it? What would your insurance products look like?

Similar questions arise for the introduction of the self-driving car, already being developed by several auto makers.

Vehicle leasing, which Kilpatrick expects to take off in South Africa in time, also changes the standard idea of owning a vehicle and paying if off in monthly installments.

Although some of these developments are a “very long way off” in South Africa, the country and its automotive industry will also one day have to answer these questions, already posed in cities such as London, for example.

Zero-emission EVs still require a mind-shift here and abroad, notes Kilpatrick, with range anxiety – the fear that the battery will die before the journey is completed – remaining an inhibitor to large-scale sales.

The cost of EVs and the lifespan of the battery also still detract from these vehicles’ commercial attraction.

“It will come down to how hard governments push the use of EVs through some form of incentive, and people's appetite for saving the earth,” says Kilpatrick.

South Africa faces its own unique EV paralysis, linked to the long distances typically travelled in the country, and the problem around stable power supply, she adds.

Another change the global automotive world faces is that a new generation of grown-ups, Generation Y, is not interested in “owning things”, says Kilpatrick.

Being part of the connected world is the most substantial part of their material ambitions, and what is important this year may not be important the next one – which means a constant shift in brand loyalties and values.

How do you sell a car to someone of Generation Y?

Another evolution in the automotive world will be three-dimensional (3D) printing, still in its infancy, but fast gaining traction as the future of manufacturing.

“The evolution of 3D printing will see it play a massive role in parts production especially,” believes Kilpatrick.

This could, one day, provide a solution to the large percentage of imported parts on South African made vehicles; these days more costly than usual as the rand continues its downward trend against the major currencies.

However, adds Kilpatrick, it “will be a number years” before the commercial 3D printing of parts will become a reality as, for example, the integrity of these parts will have to be tested first.

Edited by Creamer Media Reporter

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