Over the last two years, a massive shift has occurred in the car industry. Thanks to the pandemic, a host of supply chain shortages—including the lack of semiconductors—has helped accelerate some of these changes. Still, there were others already on the horizon, including the push for more climate-conscious vehicles (i.e., EVs), connected cars with additional features, and more digital purchasing options for customers. 

This article covers six predictions for 2023 that car dealers should understand and prepare for in the upcoming year. 

What Can Used Car Dealers Look Forward to in 2023?

1. Car Buying Options Are Shifting Even More Digital

With the pandemic, we saw a considerable increase in customers purchasing vehicles online. Expect this trend to continue. In a recent study, 7 out of 10 consumers will prefer to buy their next car online instead of visiting a dealership in 2023¹. This figure remains the same as the 2021 survey results, showing that this trend is still ongoing. As the online purchase experience evolves, customers will want to do more online before visiting a dealership, such as researching inventory online, completing virtual walk-throughs, securing financing, and even purchasing the vehicle right from their computer or smartphone². 

2. Increase in Connected Cars and the Features They Support)

The term "connected car" has been around for a while, but as more vehicle inventory gets equipped with a connection to the internet, expect consumers to look for additional features that only connected cars can provide. 

To put it simply, a connected car is a vehicle that has a connection to the internet. With this connectivity, the vehicle can access/send data, download software updates/patches, connect with other devices (Internet Of Things or IoT), and provide WiFi internet connection to the passengers³.

Some notable features that connected cars offer include: 

• Remote Parking through a smartphone app or key fob. 
• Security through real-time location sharing/tracking, emergency SOS calls. 
• Entertainment, such as listening to music and watching videos.
• Added safety features because connected cars can share information, such as traffic movement. 

3. More Autonomous Self-Driving Vehicles

Currently, fully autonomous vehicles aren't available to consumers. However,  they are closer to  reality for public transportation, so automakers are inching their way toward an autonomous future every year. There are already level 2 and 3 autonomous driving vehicles on the road, including Tesla's autopilot, which is currently the most advanced system⁴. 

The most common autonomous driving features available  in  new vehicles in 2023 intend to make driving less taxing and help prevent  accidents. For long drives, new cars will include features like hands-free driving on pre-mapped highways and handling portions of steering⁵. Automatic Emergency Braking, a safety feature that can apply the brake without driver assistance, is there to help prevent accidents. 

Studies have already shown that autonomous vehicles have proven their safety benefits, including reducing stoppages, and preventing accidents associated with driver fatigue. An autonomous car is much more aware of its surroundings and can predict braking behavior, traffic, and optimal routes to reduce CO2 emissions and save on fuel⁴.

4. Dealers Will Explore New Revenue Streams With EV Maintenance 

Due to the lower maintenance needs of  EVs, dealers need to come up with innovative ways to service-type packages to customers to create new recurring revenue streams. EVs allow drivers to skip services  like oil changes, spark plugs, exhaust systems, and fuel lines, so dealers quickly need to find new ways to work with these customers⁶. 

Only washer fluid, tires, and wiper blades sustain regular wear on an EV. Dealers now offer brake caliper lubrication to ensure they operate smoothly, simply because EVs use their brakes less³. 

Tires are the only major components that wear out quicker than a combustion vehicle due to EVs' increased weight and power delivery. With car makers emphasizing the need for energy-efficient tires to improve range or low-noise tires for quietness in the cabin, this is another avenue dealers  can go down for new revenue streams⁶. Either way, dealers must expand their horizons on offering additional services for EV owners in 2023 and beyond.

5. Car Brands Partnering With Big Tech to Keep Up Pace 

As cars continue to evolve into huge mobile computers, every car manufacturer has big decisions to make on whether they will invest internally to build out their technology departments or partner with Big Tech to help them develop the technology these new electric, autonomous, and connected vehicles need to make them function correctly. Expect to see more partnerships like Ford with Google, as the two companies are partnering in 2023. As a result, millions of future Ford vehicles will be powered by Android, with Google apps and services built in⁷.

6. Fuel Cell Technology Will Offer Another Option

Despite the transition to full-battery electric vehicles, hydrogen is still knocking on the door for some manufacturers. Hydrogen-powered cars have quick refuel times, a more extensive driving range than battery-electric vehicles, and only emit water from their tailpipes.

Globally, companies are heavily investing in fuel-cell vehicles in the truck and SUV space. Germany, China, Japan, South Korea, and the US will be at the forefront of investment in 2023. 

Despite Tesla starting production on their full battery semi-truck, hydrogen offers advantages in this space because batteries are heavy and take longer to recharge than refilling hydrogen tanks⁴.

Dealers Need to Keep Up With Auto Industry Trends in 2023

Dealers have an important customer-facing role in handling vehicle sales, servicing, and support. Now more than ever, they need to keep up with consumer preferences, emerging technologies, and the new normal of the auto industry since the start of the pandemic.

EVs and alternative fuel vehicles form a massive part of this. If dealers want to continue bringing in revenue and car sales, infrastructure and training are needed. 

ACV Auctions  is here to help. With a host of EVs and combustion vehicles, we have an expansive inventory to suit all types of dealers. We can't wait to work with you at ACV Auctions! Begin your journey and source impressive inventory by registering with ACV today.

Sources

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1. S. Tucker, “Five Trends to Watch for in 2023” 17, Aug 2022 [Online]. Available: https://kbb-autotrader-oem.com/camp-360-blog/automotive-digital-marketing-2023-predictions/

2. Affinitiv, “2023 Automotive Industry Trends: 7 Developments to Keep in Mind,” 11 Oct 22. [Online]. Available: https://www.affinitiv.com/2022/10/11/2023-automotive-industry-trends-7-developments-to-keep-in-mind/.

3. Team Acko, “Connected Cars: What is it? Features and Benefits”, 14 Oct 2022 [Online] Available: https://www.acko.com/car-guide/connected-cars-features-benefits/‍

4. TEAM LINCHPIN, “Automotive Marketing & Industry Trends Shaping 2023,” 1 Oct 2022. [Online]. Available: https://linchpinseo.com/automotive-industry-trends/#2-a-rise-in-digital-automobile-sales. 

5. J. Patel, “Cars That Are Almost Self-Driving in 2022” 23 May 2022 [Online] Available: https://cars.usnews.com/cars-trucks/advice/cars-that-are-almost-self-driving

6. B. Templeton, “Electric Vehicle Maintenance Is Super-Cheap, But The Dark Secret Is Tires,” 2 May 2022. [Online]. Available: https://www.forbes.com/sites/bradtempleton/2022/05/02/electric-vehicle-maintenance-is-super-cheap-but-the-dark-secret-is-tires/?sh=7ec9dee13831.

7. Ford. (2021 February 1). FORD AND GOOGLE TO ACCELERATE AUTO INNOVATION, REINVENT CONNECTED VEHICLE EXPERIENCE. https://media.ford.com/content/fordmedia/fna/us/en/news/2021/02/01/ford-google-accelerate-auto-innovation.html#:~:text=learning%20(ML).-,As%20part%20of%20this%20new%2C%20six