Automotive Companies Turn to Service Innovation to Redefine Latin America's Mobility
Combining efficient powertrains with connected services and driver assistance systems creates fresh growth opportunities, finds Frost & Sullivan's Mobility team
SÃO PAULO, June 1, 2017 /PRNewswire/ -- Large-scale disruptions in the Latin American automotive industry over the past few years have rendered traditional structures redundant and given rise to new ecosystems wherein services share the spotlight with product innovations. Automotive companies are enthusiastically adopting "as-a-service" business models in mobility, vehicle financing, aftermarket parts and services, as well as automotive retail in an effort to optimize resources and increase value in this dynamic industry.
"To stay afloat in a very challenging market, automotive value chain participants are offering more efficient powertrains and safety-related features, including assisted driving. These product and feature improvements, when coupled with innovative in-vehicle features related to comfort, convenience, versatility and utility, will endow them with a huge competitive advantage," said Frost & Sullivan Mobility Program Manager Yeswant Abhimanyu. "Another promising growth avenue is vehicle connectivity technologies that enable next-generation connected infotainment and services."
Latin American Passenger Vehicle Market Outlook, 2017 is part of Frost & Sullivan's Automotive & Transportation Growth Partnership Subscription. According to the study, the automotive market in 2016 declined by 3.5 percent and fell just below the 5.0 million units mark. While Brazil experienced a decline of almost 20 percent, dipping below the 2.0 million units mark, Mexico had a record year, with unit shipment of more than 1.6 million vehicles. Meanwhile, Argentina and Chile bounded back to post positive growth rates.
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Even amid challenges of declining sales and investments, economic volatility, rising vehicle prices, and the need for service innovations, automotive companies need to remain focused on long-term business sustainability and diversification. Participants will seek to establish partnerships, share knowledge, digitize business processes and differentiate products to remain relevant in such an environment.
Furthermore, the aftermarket is moving toward more customized services, with an emphasis on eCommerce platforms, Big Data and customer relationship management (CRM). Other future trends in the path of a digitally transformed Latin American automotive industry are:
- Industrial Internet of Things (IIoT) 4.0 in manufacturing, employing flexible manufacturing processes and robotics
- New retail formats such as concept and flagship stores, lifestyle centers
- Novel mobility solutions such as e-Hailing with a revenue potential of more than $6.0 billion, bike-sharing, integrated mobility through single payment platforms, journey planning
"Overall, innovative business models are unbundling the automotive industry, offering more targeted services," noted Abhimanyu. "The new models in auto parts and service retailing increase customer convenience as well as deliver more personalized services, creating fresh revenue streams."
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Latin American Passenger Vehicle Market Outlook, 2017
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Contact:
Francesca Valente
Corporate Communications – Latin America
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