By Abhishek Gupta, Founder & Managing Partner, Pierag Consulting LLP
The automotive industry is undergoing a significant transformation, driven by technological advancements and changing consumer preferences. As a consulting firm with a keen focus on industry trends, Pierag Consulting LLP presents the seven key technological trends that will shape the automotive sector in 2024.
1. Rise of autonomous vehicles
Autonomous vehicles are becoming a reality, with rapid advancements in artificial intelligence, machine learning, and deep neural networks. These self-driving cars promise to redefine individual mobility by reducing the need for human intervention, even in complex traffic situations. Autonomous vehicles will enhance safety, expand last-mile delivery options, and improve fuel efficiency by 10%.
2. Vehicle subscription models
The uncertain economic climate has led many younger consumers to reconsider traditional car ownership. Vehicle subscription services are emerging as an attractive alternative, offering flexibility without the long-term financial commitment of ownership. Despite concerns about availability and costs, this model is gaining traction, with a growing interest in subscription-based mobility solutions.
3. EV adoption
The push towards sustainable energy has accelerated the adoption of electric vehicles. Governments worldwide are offering incentives for EV purchases, and automotive companies are investing heavily in EV technology. The increasing availability of charging infrastructure is making EVs more accessible, contributing to their growing popularity.
4. Connected car technology
Connected cars are equipped with internet access and a range of sensors, providing real-time data on vehicle performance and driving conditions. This technology enhances driver safety, optimizes vehicle maintenance, and enables new business models like usage-based insurance. The integration of 5G networks will further bolster the capabilities of connected cars.
5. Shift to shared mobility
Shared mobility services, such as ride-hailing and car-sharing, are becoming mainstream. This trend is driven by urbanization, environmental concerns, and changing consumer attitudes towards ownership. Shared mobility reduces traffic congestion and environmental impact while providing convenient transportation options.
6. Advanced driver assistance systems (ADAS)
ADAS technologies, including adaptive cruise control, lane-keeping assistance, and automated parking, are becoming standard features in modern vehicles. These systems enhance driving safety and comfort by reducing the likelihood of human error. As technology evolves, ADAS will pave the way for fully autonomous driving.
7. Regulatory and accounting changes
The automotive industry’s shift towards subscription services and shared mobility requires new accounting treatments. Companies need to adapt to new revenue recognition standards (e.g., ASC 606) and leasing standards (e.g., ASC 842). Proper accounting for deferred revenue and subscription fees is crucial for accurate financial reporting and compliance.