Future of automotive sales and aftersales study

The future of car sales in 2035

To get a clear picture of current industry trends and their implications for the future of car sales and the automotive aftermarket, including impact on OEM revenues and profit, this study seeks to answer the following key questions:

• How will trends affect traditional business segment's vehicle sales and aftersales?
• What are opportunities and risks involved with new business segments such as mobility and digital services?
• When and how will these developments and trend effects differ across core markets?

Key takeaways from the study

• Without significant transformation, OEMs will likely struggle to remain as profitable as today in 2035.
• Highly profitable aftersales business may suffer from the strong negative impact of electrification. As a result, total business will likely decline by 10 percent despite growing car parc by more than 50 percent.
• More than 80 percent of total growth would be generated in the Chinese market. Europe, the United States, and Japan are expected to show only moderate growth.
• Only very few players will win the race for mobility services, and only a strong emergence of current industry trends will make mobility as a service an attractive revenue stream.

The study underlines the enormous pressure on car manufacturers to act. This pressure was already high before the coronavirus outbreak⁠—it will further increase the need for transformation in the industry. As a result of the coronavirus pandemic, we expect the developments forecasted in the study to occur faster and more intensively.

Trend analysis and forecast of industry drivers

For each automotive trend, Deloitte forecasts a base case and a disruptive case of trend emergence. This reflects different manifestations of consumer, business, technological, and regulatory forces and lays the foundation for a nuanced assessment of trends. The study focuses on industry drivers with the highest potential for disruption, ultimately resulting in four main trends that will shape the future of car sales and the automotive aftermarket until 2035:

• Connectivity
  By 2035, the connectivity of both cars (connected car) and customers/drivers (connected customer) will differ significantly across markets driven by technical infrastructure and consumer preferences. 

See graphic: Share of cars with V2X functionality for new vehicle sales in 2035.

• Alternative drivetrains
  In the future, various drivetrains will coexist, with battery-electric vehicles leading the way. The emergence of alternative drivetrains is mainly driven by decreasing production costs, regulation, charging infrastructure, and increasing performance.

See graphic: Share of cars with alternative drivetrains for new car sales in 2035.

• Shared mobility
  Shared mobility will increase the utilization per vehicle and shift ownership from private customers to fleet operators. Growth in mobility services is expected with the emergence of autonomous driving.

See graphic: Utilization per vehicle measured in average kilometers driven per year in 2035.

• Autonomous driving
  The largest technological hurdle lies between level 3 and level 4 autonomous driving. The expectation is that at least level 4 is to be applied initially in specific use cases only.

See graphic: Share of autonomous vehicles (level 4/5) for new vehicle sales in 2035.

See graphic: Advanced driver-assistance systems (ADAS) levels–overview.

As an integral part of this study, a model to assess the quantitative implications of possible future states on OEM revenues and profit pools was designed. For each revenue stream, in both new and traditional business segments, it analyzed how levers react to the emergence of industry trends in order to calculate OEM revenues and profits.

Download the infographics

Conclusion and priority actions

• Create transparency to make profound decisions
  As an initial step, the study recommends that OEMs create full transparency about how industry trends affect their business, today and in the future. OEMs are encouraged to take the report analysis of the proxy OEM and carefully adapt it to the specificity of their own business.
• Ensure enablers are in place
  Whether OEMs aim to participate in new business segments or not, in order to respond to technological advancements, the transformation of current products and processes is imperative.
• Ensure omni-channel capability
  OEMs have to significantly transform their current stationary sales and after-sales network regardless of the future-state scenario. This includes various fundamental sales transformation changes.

Download the full study to learn more about the future of car sales and the automotive aftermarket in 2035.