Francis Farrelly - School of Economics, Finance and Marketing
The Australian Automotive Industry is undergoing a period of intense disruption and firms in the industry need to reassess strategy, reposition in a changing market, and invest in staff capabilities.
Globally the automotive industry is experiencing unprecedented disruption including the advent of CASE (connected, autonomous, shared and electric cars) and an increasingly digitally savvy and value-conscious consumer. This disruption also ensures that change, adaption, and the need for improvement in the approach to marketing are the new norm for the foreseeable future. Added to that is the fact that automotive industry has been hard hit through the pandemic, and there are now additional issues to contend with.
The research reported within forms part of a grant with the Destination Group of Companies. It involved extensive primary research with senior managers and industry leaders, employees, as well as commissioned reports, and other secondary research from across the globe. It deals with Disruption in the Australian Automotive Industry, initially involving CASE and related marketing implications, and now also extending to Disruption in the context of the pandemic and possible ongoing consumer behaviour implications.
The first stage findings are currently developed in three areas, CoVid and consumer behaviour implications, CASE Disruption and strategic marketing implications, and implications from the employee level in terms of their role in assisting the firm to work successfully through this seismic change.
The early research linked to CoVid suggests that going forward car buyers will place greater emphasis on:
- Brands with heritage as their value is more tangible and reliable.
- Authentic messaging.
- After-sales relationships.
- Digital-based buying and servicing.
- Connected, comfortable spaces, i.e. cars with strong digitally enhanced interfaces and useful, attractive design as this projects them as attractive private spaces.
Whereas in the CASE context key findings help to explain why people will (or not) buy electric cars and how fast the uptake will be. While benefits to the environment matter, critical too are the practical costs and benefits (how far can I travel, where, how easily, and how quickly can I recharge), being cost competitive or cheaper than petrol cars, and an enjoyable driving experience (especially in relation to some types of car, like sports and SUV’s). Unlike other reports, it also reveals real questions about whether the shared car may be a substitute for ownership or the second family car. Very real and multiple perceived risks are associated with autonomous cars but overall the preliminary data from sources across the world suggests people will welcome more advanced autonomy. Where some in the industry are suggesting that brands will matter less going forward in this brave new CASE world, my research is indicating they will matter more. The research also questions the future readiness of the industry to manage through this change including gaps in the level of market knowledge and marketing capabilities across the industry.
From a capability perspective the research identified that through this extreme (and elongated) period of Disruption, there is also a great opportunity for those willing to embrace the change, better understand it, and acquire new knowledge and skills to forge ahead in the marketplace. In this regard two core and overlapping challenges are key.
The first is employee engagement and retention, and the second is capability building from a market orientation (firm-level) and marketing (employee-level) perspective.
Critically, from the employee perspective, the research also highlights that employees are decidedly more comfortable dealing with change if they can be active in enabling the future success of the firm.
Of vital importance is the need for employees to identify with the company and its purpose, beliefs and ways of doing business as this builds pride, confidence, and the capacity for collaboration, adaptability and agility. Enabling employees to be part of the solution, through careful building of market knowledge and new, customer-centric ways of thinking, is also a significant issue and can involve distinct approaches. This includes employing ‘market-back’ experiential learning.
Professor Francis Farrelly is a Professor of Marketing in the School of Economics, Finance and Marketing and is the leader of the Consumer Culture Insights Group