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#BizTrends2019: The way we love our cars is about to change
Kriben Reddy, head of Auto Information Solutions at TransUnion
There are numerous trends driving this radical transformation of the industry. But for me, there are two major trends that are only going to accelerate in the local market in 2019 and beyond.
The changing face of car ownership
Traditionally, we would finance our vehicles through major banks. It was simple: the bank would take a big number, and make it manageable and affordable for us through monthly instalments. In recent years, they’ve got even more innovative on financing, with residual values, balloon payments and extended payment periods making it even easier for us to own our wheels.
In future, though, this won’t be the case. We’re seeing a clear change from ‘car ownership’ to ‘car usership’, where access to a vehicle is more important than ownership of a vehicle.
Essentially, we’ll buy our cars on subscription plans – and why not? We already subscribe to Amazon Prime, Apple Music and Spotify, and this concept is gathering pace in the world of car sales.
This ‘usership’ approach means you get to drive any vehicle you want, and can change vehicles far more often, without the issues that come with buying or leasing a car. Several local car brands already have similar plans in place, in the form of Guaranteed Future Value (GFV) finance products, and I expect to see more range and flexibility in the market as traditional ownership models change. Will we migrate to ‘shared’ car use models in the next few years? Don’t bet against it.
The rise of the connected car
Perhaps the area where we’re seeing the most change in the automotive industry is the rise of connected cars, which are fundamentally transforming the industry from provider of services and products to a provider of holistic experiences. In short, we’re seeing a revolution in the way we interact with our cars.
We’re already seeing cars on our roads that have artificial intelligence (AI) built in, which remembers your preferences, predicts your needs, and tailors the driving experience accordingly. But truly connected cars go beyond that to embed services like content, entertainment, productivity and social media into our everyday commute. They will deliver recommendations like restaurants, hotels and fuel stations along the way, and let you know the expected weather on your route.
The second element of this connectedness is the car’s ability to communicate with the dealer and manufacturer. Right now, your car tells you when you need a service – but you need to make the booking and do the arrangements yourself. Connected cars notify the dealer directly when a car needs repair, and will set up everything from an appointment to a courtesy car.
Going forward, cars will even communicate better with other cars, making our roads safer in the process. We’re not likely to see autonomous cars on South Africa’s roads in the immediate future, but they are coming. There’s never been a more exciting time to be a car lover.