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The Automotive Intelligence Series – The Future in Focus

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By Jessica Ruby and Sabrina Arruda

Ontario Premier Kathleen Wynne kicked off the Auto Intelligence Series (AIS) as part of the opening today of the 2018 Canadian International AutoShow. The Future in Focus panel looked at industry change, trade rule risks and extensive investments into the future of automotive.

Wynne opened the panel with remarks on the changes the automotive industry is facing. Ontario is entering an automotive age where we need to avoid having any blind spots and adapt to changes, she said. This topic has been a common theme as the industry enters into an era that seems to be signified by disruption.

Wynne noted that the Ontario government is making a major investment in education around autonomous technology and specifically “teaching cars to think.”

The importance of such future-ready investments was echoed by the CEOs of the Canadian operations of Hyundai, Kia, Mercedes-Benz and Nissan, as well as Edwin Ulak, Chief Product Officer at AutoTrader.ca, all of whom provided insights as to what the automotive future holds in Canada.

Investments in Technology and a changing e-commerce landscape

“We think about disruptions and the changes in our industry, we immediately gravitate to product but frankly that isn’t where the disruption, in our opinion, is going to come from,” said Don Romano, president and CEO of Hyundai Auto Canada Corporation. “When you look at the industry and look at all the disruptions that take place, you’re going to see that they take place in the way people acquire products.”

Other panellists agreed and joined into the conversation about simplifying the consumer journey. “Eighty-six percent of consumers are doing their primary research in terms of purchasing a vehicle online, 69 percent of consumers are doing that deep research in marketplaces,” said Ulak. “We have seen substantial changes over the past couple of years in terms of dealerships and how people interact with dealerships,” with multiple surveys showing that consumers wanted transactions at the dealership to be quicker he said.

The conversation about the changing landscape of car purchasing and the consumer demanding e-commerce is one we’ve heard echoed through the industry in recent months. The OEMs addressed that they are aware of the pain points consumers are suffering around transparency and negotiation, and are working to address them, and in multiple ways.

Electrification

“I don’t think there is a person here from the OEM standpoint that can’t talk about the billions that are being invested into innovation and technology,” said Ted Lancaster, vice president and COO of Kia Canada. The additional OEM panellists agreed that electrification is a major area of investment. “The goal of every OEM is to reduce greenhouse emissions,” Lancaster added.

Despite the seemingly insurmountable infrastructure changes that need to happen before widespread adoption is possible, the OEMs are confident that consumer demand will follow once the technology is advanced enough to allay range anxiety fears. “Combustion engines are going to go the way of horse and buggy,” confirmed Romano.

“When it comes to electric vehicles, we see major increases [in searches], but nationally it’s still only around .5 percent, and up to one percent in Quebec,” said Ulak. “While the growth rates are phenomenally fast it’s still not a major thing in terms of consumer consciousness… but I do think the trend is here to stay.”

When the conversation of the automotive future comes up, so does the discussion of autonomous vehicles. All the OEMs are already releasing vehicles with automatic cruise features that can help alleviate frustrations and repetitiveness in major traffic by removing the need for the driver to continually be on and off the brakes and accelerator.

All panelists reinforced that they are manufacturing cars that are fun to drive, and the idea isn’t to put the consumer in the backseat. Autonomous features reinforce a move towards increased safety too, which will become increasingly important to consumers in coming years.

The major theme discussed by today’s panel and throughout the auto industry right now is that change is coming. Consumers are demanding a smoother process to purchase vehicles, and the move to electric and autonomous vehicles – while there are many hurdles to still overcome ¬- is coming. It’s just a question of when.

One message repeated again and again by the OEM panellists is that “we will find a way to thrive and survive.” Ulak agreed stating, “We expect that [as an industry] we will need to rapidly transform again in a short period of time, in order to stay relevant to consumers.”

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