Unlike fashion or even technology, the lead time for an automobile is approximately five years, so it is more often that the automotive companies are anticipating trends and reacting to them rather than setting them. With that said, macro-trends are vitally important for the automotive industry to understand, anticpate and plan for. While it is relatively easy for a technology company or a garment manufacturer to react to what is trending in society, it is considerably more difficult for an automotive company to revise their manufacturing plans to appease to the whims of their customers.
One interesting macro-trend in the automotive industry is the move to smaller, more efficient vehicles. Small cars have been available to the American consumer since the first Volkswagen Beetles were imported in the 1950’s. They reached their tipping point during the fuel crisis of the 1970s, but they were always considered to be inexpensive, frugal machines for those who didn’t care about driving or impressing the neighbors. Until now.
While a myriad of machines in a multitude of sizes will always be offered to the American car consumer, the trend towards smaller, easier to manage and more efficient vehicles is clear. However, this latest iteration of popularity doesn’t necessarily translate to bare bones ecnoboxes. The American consumer is demanding the luxury features and safety scores once reserved for the luxury brand elite to be available in their smaller vehicles. One can equip some of the least expensive vehicles with features like satellite radio, navigation, bluetooth, cruise control, premium stereos, heated seats and front and rear side airbags.
All these features equate to higher prices, but the consumer is willing to pay. MINI proved that Americans would pay for a premium small car that delivered luxury features and fuel economy. The trend will continue as manufacturers are launching vehicles, like the new Ford Focus, that not only look amazing but also deliver on the promise of features, functionality and technology in a smaller package. This leads us to question what exactly is luxury if a Ford Focus delivers the same ammenities as a BMW 7 Series. That we’ll leave for another post.
Photo Credit:Joe LaMuraglia