There’s no doubt that the pandemic has had a huge impact on the automotive industry. But what does the future of car manufacturing look like, and what challenges will these new trends bring? Mark Barclay from vehicle experts PartsForAllCars.com is here to tell us more.
The pandemic has turned a staggering amount of industries upside down. In fact, The World Bank found that a quarter of businesses saw their sales fall by 50% as a result of COVID-19. But while industries such as hospitality and travel are assumed to have taken the brunt of the impact, car manufacturing has been significantly affected by the pandemic. In the UK car production was down 29.3% in 2020, with less than a million units being made throughout the year (SMMT).
Now that restrictions have been significantly eased, many industries are making a speedy recovery. Although the automotive industry has begun to recover from the impact of COVID-19, the effects are still being felt, with the recovery being somewhat weak so far in comparison to other industries (The Guardian). But what does this mean for the future of the industry, and will the manufacturing process look different as a result? Here are some predictions of what’s to come to help you get a clearer view of the future of car manufacturing.
The industry will recover, but it’ll take some time
The automotive industry is currently struggling with a slow and weak recovery, as a result of supply chain issues. The global computer chip shortage is bad news for a wide range of manufacturing businesses, from toothbrushes to washing machines. But it has been proven to be particularly bad news for the car manufacturing industry, as evidenced by Toyota when the company announced they were slashing their output by a whopping 40% in September (The Guardian).
But just because the industry isn’t currently making a strong and speedy recovery, this doesn’t mean that the future doesn’t look bright. Although the shortage is predicted to last for a while yet, when it does clear it’s expected that car sales will soar. In fact, some UK car manufacturers have already seen signs of improvement (The Business Desk).
When the global supply chain issues do eventually resolve, car manufacturers will likely become busier than ever before, as demand is predicted to rise sharply during this period. This could lead to the industry creating more jobs, which is good news for both car manufacturing and the economy.
Electric vehicles will dominate
Although electric cars have long been considered the future of the industry, the switch to electric cars has accelerated throughout the pandemic. In fact, while car sales as a whole plummeted in 2020, sales of electric cars shot up by an impressive 43% (Investor Intel). And this number isn’t expected to shrink anytime soon, as 46% of UK motorists want their next car to be at least partly powered by electricity, with 52% of motorists claiming that the pandemic has made them more conscious of their impact on the environment (AVIVA).
It is therefore highly likely that car manufacturers will give more attention to electric vehicles than ever before. And the good news is that this shift shouldn’t be too much of a financial burden either, as electric cars are predicted to be as cheap to make as petrol and diesel models by just 2024 (The Guardian).
New technology will transform the industry
The automotive industry has always been ahead of the curve when it comes to technology and automation, and this is expected to continue in the coming years. Smart factories with AI-powered tools are considered to be the future of the manufacturing process. This is good news for car manufacturers, as the money and resources saved from these investments in the long term can be directed towards implementing innovative ideas.
3D printing is one particularly powerful technology that is set to revolutionise the industry. The technology is evolving rapidly, and is now capable of creating incredibly detailed and intricate designs at a much faster pace, saving manufacturing companies both time and money. Plus, 3D printing can create replacement pieces for legacy vehicles that aren’t in production anymore. This allows classic cars to be kept on the road for years to come (Manufacturing Tomorrow).
Manufacturers will branch out into new products
Over the course of the pandemic, we’ve seen a range of businesses use their resources and equipment to help in the fight against COVID-19. Car manufacturers proved to be particularly helpful during this period across the globe. For example, both Ford and Rolls Royce produced a number of ventilators to be used by the NHS at the beginning of the first lockdown (Automotive News Europe).
And it looks like this trend wasn’t just a one off. In the coming years, there is the potential for more automotive companies to diversify their offerings and start manufacturing other products too. In fact, Hyundai have already indicated that they are aiming to be a tech firm and not just a car manufacturer — they’ve already created their own humanoid robot (BBC News)!
The challenges of these predictions
It’s clear that car manufacturing, and indeed the automotive industry as a whole, is facing some challenging times ahead. Post lockdown recovery has already proven to be slow, and supply chain issues are expected to last until mid-2022 at the earliest, but may not be resolved until as late as 2023 (CNBC). This is a challenge for all car manufacturers, and many may struggle to keep up with the costs if their revenue is down significantly.
On top of this, while the shift to electric vehicles is great news for the planet, there are a number of challenges ahead for car manufacturers. This change will be pricey for companies, as they need to both purchase new equipment and spend a lot on staff training too. Plus, although electric vehicles are rapidly increasing in popularity, they are still not as popular as diesel and electric models, so it may be a while before companies see returns on investments.
That being said, although these challenges may be a struggle, there is plenty of good news for the future of car manufacturing too.
Why the future is looking bright
When the automotive industry does get back on track, it will likely return with a bang. In fact, the next decade looks set to be a positive one for the industry when more manufacturers make the switch to producing electric vehicles. As the ban on new petrol and diesel cars is set to come into force in 2030, many consumers are likely to purchase an electric or hybrid car before this date. In fact, Ofgem has found that almost a quarter of UK households plan to buy an electric or hybrid vehicle within the next five years.
Plus, the new technology that’s being introduced to the manufacturing process is already making a significant impact. In the US, industrial robots have helped increase vehicle production by around 16% annually (CNBC). And as manufacturing technology continues to evolve, this number can only increase over time.
Although it has been a challenging couple of years for the automotive industry, we are starting to see the light at the end of the tunnel. While these predictions will no doubt come with their challenges, the positives outweigh them to make the future of car manufacturing look bright.