- Source: BMW

We're entering the golden age of automotive sales

Here in Australia, we've pretty much conquered COVID19. And life here now is like looking into an 8-ball for the rest of the world.

6w ago
39.7K

If we had the conversation I'm going to have with you today two months ago? It would've been very different. Two months ago in Victoria, Australia (where I am), the world looked different. We were in the midst of the toughest and longest combined lockdown enacted anywhere else on earth and we had a near smidge of the COVID19 caseloads that other countries like America had. And to be frank? We weren't all that happy about it. We still aren't. In May of this year, Australia had all but conquered COVID19 and thanks to a bureaucratic mistake we experienced a second wave.

Australia at this second is a very different place to where I or I'm sure the rest of the world envisaged it to be at the start of December. I would say it's business as usual here in Australia but I would also be wrong.

Today though I can say we've conquered COVID19. Victoria hasn't had a COVID19 case in over 31 days and bar South Australia (who had a very very small outbreak a few weeks ago) every other state in Australia similarly hasn't had a locally transmitted case of COVID19 in over a month. That means the virus here (technically speaking) has been completely eliminated and with travel bans and a strict and compulsory quarantine program, it's unlikely to come back either. Especially after the mistakes in that quarantine program that brought on round 2 of COVID19.

Amazingly as well, Australia at this second is a very different place to where I or I'm sure the rest of the world envisaged it to be at the start of December. I would say it's business as usual here in Australia but I would also be wrong. Because business is bloody well booming. For the first time in nearly 5 years, year on year growth for automotive sales here in Australia has gone absolutely haywire. The dealerships that remain (after many were shuttered during the pandemic) are selling in record amounts and with record profits.

It's worth noting that there are still issues with automotive stock in Australia but at the same time this has uniquely created a situation of demand in dealerships and is stopping what was previously dubbed a price wars within car brands. Two BMW dealerships, for example, competing for the same customer on the same car.

To me? None of this in the slightest is all that interesting. I expected certain products to become growth products on a large scale as a result of COVID19 and transport and mobility products were always going to be one of those sectors. What I do find interesting is what this means for the rest of the world, because Australia right now is the magic 8-ball for everyone else in the West.

To add to this argument there's been an onslaught of product launches in the past 6 months and more coming in the next 6 that'll begin a product lifecycle, there have also been a bunch of new products that have never been on the market before launched. Cars like the Rivian R1T and R1S, the BMW 4 Series and the new Honda CRV. Most of these products haven't even made it to Australia yet and that shows just how hot the automotive market is going to be on the way out of COVID19.

The product lifecycle change is fantastically timed as well with most automotive makers poised to make the big jump into PHEV, EV and fuel cell technology. Whilst that isn't the cause of this new wave of carbuyers, it's certainly going to catalyse the environment and with luck will spur the renewable revolution that manufacturers have been touting for almost five years now.

The product lifecycle change is fantastically timed as well with most automotive makers poised to make the big jump into PHEV, EV and fuel cell technology.

That aside though, I was having a conversation to my colleagues who also do some freelance content creation for DriveTribe here in Australia about the past 5 years of automotive and the changes in products. We were discussing this because it's almost time for my partner and I to look at alternatives for our second car, the Range Rover Velar, which we're verging on ownership of 2 years now. And interestingly we couldn't find a thing on the current newcar market that tickled our fancy more than the Velar.

I mean that car is now more than three years old. It's practically a dinosaur in car years and no-one has really bettered it. They've matched it of course but they haven't really bettered it. That makes me question whether the incoming new products across the automotive market are going to be enough to convince people they need to buy a new car.

I'll give you an example; semi-autonomy. 3 years ago there were only certain manufacturers that held the podium on level 3-5 autonomy. The closest most came to semi-autonomy was lane departure warning and features like lapse of concentration detection. Today every car has adaptive cruise control, lane departure, lane assistance, stop-go assistance and the list goes on. Basically presuming your hands are on the wheel, any new car on the market can drive you home in todays world.

But no-one's really taken the next step into full autonomy. We know that both the technology and software is out there. I personally have witnessed it in action. Volvo said that here in Australia the only things that were holding their cars back from full autonomy was Kangaroos (ironically) and the Government regulations. But no-one has really blinked first yet. The closest we have is a severely restricted Tesla and a KIA Seltos that can park itself.

Autonomy as a feature in general has been a bit of a hush hush topic for 12 months and that really doesn't make a whole heap of sense to me. Autonomy is going to be the backbone of next generation ridesharing and taxi services and this was further reinforced by issues arising from two foreign bodies in an enclosed space for length periods of time. That is a problem that can in the future be solved by autonomy.

It's not just that that has stalled though. It's general ergonomic features that haven't really made much of a move either. Apple Carplay for example hasn't changed in almost 5 years. If anything their speed to make UI updates has hampered third party applications keeping up, but the core features of the service has stayed the same.

Interiors are much the same, we had more cars receiving features like massage seats but it still isn't mainstream enough to garner attention from the least attentive customer. And the duel and tablet sized screens have now been around for almost 5 years. Since Volvo first introduced them on their XC90 update pre-2015.

So it may be true, we're entering the golden age of automotive sales, but my feeling is that carmakers have to be quick to the draw in the next 12 months. After that and once international travel returns the opportunity may have flung past them. And Australia is the case study of the future to what those carmakers can plan for over the next 6 months while Europe, Asia and America continue to struggle with the COVID19 plight. Because once case numbers start to come down and a vaccine starts to be administered it's going to be too late. That ship will have sailed, or speaking more specifically. the car will have driven.

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Comments (41)

  • Having lived through Melbourne’s lockdown I can concur that It was pretty brutal...but I also concur that the place seems to be energised on the way out. Whether we’ll fall in a hole when the government stimulus runs out in 2021 remains to be seen, but it’s looking to me like a bumper Christmas.

    With respect to things automotive (and I have a lot of contacts in automotive retail because my wife used to work in that space), they are definitely seeing upside at the moment. Australian’s are going to be holidaying locally this year with international travel still effectively banned (and Australian’s are normally probably the world’s greatest overseas travellers). So driving holidays are definitely on the agenda this year/next year. Borrowing is also cheap so why not?

    With respect to “advances in design”, i think, for Australia, EVs need the next generation of batteries before we hit a tipping point for adoption. I still think “full autonomy” is a way off pipe dream. The problem is coexistence with carbon based lifeform drivers. If you could remove them overnight and only have fully autonomous cars left alone to politely negotiate with each other, they may work. With coexistence with humans however, conservatively programmed autonomous vehicles will be quickly reduced to a grand mal of “too dangerous to proceed” nervousness in urban areas. And until my autonomous car is capable of legally driving me home drunk from the pub, I’m not interested anyway.

    Besides, when we do go to Fully Autonomous cars, I see that as the beginning of the end of the car ownership model. Why would you care anymore? Personal transportation will become a service.

      1 month ago
  • Moses said credit was a sin. Buddha said credit was a sin. Plato said credit was a sin. Saint Paul said credit was a sin. Mohammed said credit was a sin. I’m sensing a trend here. I wonder why all these philosophers agreed on this principle?

      1 month ago
    • No explanation...just a question. We can only buy cars because of easy credit. It seems to me to make my life better. So why would all these smart people think otherwise?

        1 month ago
    • Credit is what makes business work and world go around. If you are implying that easy credit getting people into deep sh*t, you are wrong. People have to have a sense of responsibility and know when and where to stop. And most people do. It's...

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        1 month ago
  • #trying to read the article in an Aussie accent

      1 month ago
  • Nothing’s gonna touch us in these golden years.

    Yup, David Bowie built minis .

      1 month ago
  • Have to agree ... after the first lockdown ended here in the uk, property flew off the shelfs... as did a large number of new/ used cars. I stood outside a tyre fitters 1 week after the lockdown ended , across the street from a Porcshe dealer, never seen so many cars with new plates leaving a forecourt before ( All nice as well!) Prices seem to be high as well in the second hand market.

      1 month ago
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