Driving decisions: Why automotive industry research matters

The automotive industry is undergoing significant transformations driven by technological advancements, changing consumer preferences, and environmental concerns. As companies navigate this dynamic landscape, it is essential for them to conduct thorough market research. Market research plays a crucial role in understanding the dynamics of the automotive industry. It provides valuable insights into consumer behavior, market trends, competitive analysis, and emerging technologies. 

Conducting comprehensive market research helps automotive companies gain a competitive edge by identifying new market opportunities and understanding customer needs and preferences. Furthermore, market research in the automotive industry enables companies to monitor industry trends and technological advancements such as new propulsion technologies like electric vehicles (EVs), Hydrogen Fuel Cell Vehicles, autonomous driving, connectivity solutions, and many more. By staying up to date with these trends, companies can anticipate market shifts and adjust their strategies according to the market.

Key focus areas in automotive market research

Here are some key areas that market research in the automotive industry typically focuses on:

How is market intelligence conducted within automotive?

Demand measurement: Demand forecasting in the automotive sector involves predicting the future demand for vehicles, parts, or specific automotive features. Several forecasting techniques which are commonly used in the automotive industry to estimate future demand are as follows:

• Time series analysis
• Regression analysis
• Delphi method
• Machine Learning and Artificial Intelligence (AI): Machine learning and AI techniques can analyze large volumes of data, including historical sales data, customer data, and external factors, to identify patterns and generate accurate demand forecasts.
  
  

Market assessment: Automotive market research focuses on determining the various stakeholders involved in the market. It helps in chalking out the entire ecosystem. Various stakeholders in the ecosystem are as follows:

• Automakers
• Suppliers
• Dealer and dealership network 
• Competitors
• Consumers
• Aftermarket segment
• Financial Institutions
• Government and Regulatory Bodies

These components collectively shape the automotive market structure. Understanding the interplay between these components is crucial for the performance of the company in the long term.

Technological intelligence: Technology intelligence in market research refers to the process of gathering and analyzing information about technological advancements, innovations, and trends within the automotive industry. It involves monitoring and assessing the development and adoption of technologies that impact the automotive sector, such as 

• Development of electric vehicles 
• Autonomous driving
• Connected cars
• Advanced driver-assistance systems (ADAS)
• Alternative fuel sources like hydrogen fuel cell vehicles etc.
• Digital transformations
• Advanced manufacturing processes

Government regulations: Automotive research explores the impact of government regulations on the market structure. It assesses the regulations related to emissions, safety standards, fuel efficiency, and trade policies that can influence the competitive landscape and market behavior.

What are the applications of competitive intelligence in the automotive realm?

Vehicle platform landscape research: This refers to the analysis and understanding of the various vehicle platforms used by automakers. A vehicle platform, also known as vehicle architecture or vehicle platform architecture, refers to the underlying structure or framework on which different vehicle models or variants are built. It includes the shared components, chassis, powertrain, electrical systems, and other fundamental elements that form the basis for multiple vehicle models within an automaker’s line-up.

Competitive landscape: The competitive landscape in automotive research refers to the analysis and evaluation of the players, dynamics, and strategies within the automotive industry. Some of the key aspects considered when researching the competitive landscape in the automotive industry are as follows:

• Key players in the industry
• Product portfolio of competitors
• Market positioning
• Research and development investments by automakers
• Manufacturing and supply chain network
• Pricing trends
• Financial performance of automakers
• Partnerships and collaborations
• Market trends and disruptions
• Customer perception and satisfaction
• Competitive strategies

Production capacity tracker: The Production Capacity Tracker in automotive research is used to monitor and track the production capacity of different automotive manufacturers or competitors. It provides information on the following aspects:

• Production capabilities (at both regional and global level)
• Capacity utilization
• Output of individual automotive plants or facilities
• Investment and Expansion Analysis

What role does procurement intelligence play in the automotive sector?

Procurement and supply chain analysis: Procurement intelligence in market research provides valuable insights and data that enable informed decision-making, cost optimization, risk management, and strategic planning. With the right procurement intelligence, automotive companies can align their procurement strategies with their overall business objectives It provides details about the following aspects:

• Partner identification
• Supplier Analysis
• Supplier Relationship Management
• Strategic Decision Making
• Opportunities for partnership and collaboration
• Supply Chain Risk Management
• Analysis for cost optimization
• Identification of opportunities pertaining to sustainable procurement

VoC/Brand performance

Assessing brand performance: Measuring brand performance through market research involves gathering and analyzing data to assess how a brand is perceived, positioned, and performing within the automotive industry. Various methods that are being resorted to for the assessment of the brand performance are as follows:

• Social Research
• Influencer Analysis
• Social Listening
• Customer Perceptions
• Customer Survey
• Dealership Intelligence

Methods used for market research in the automotive industry

Market research in the automotive industry encompasses various types of research methods and approaches to gather insights and data about the automotive industry and its consumers. Some of the common types of research methods are as follows:

1. Surveys: Surveys involve collecting data from a sample of respondents using structured questionnaires. Automotive surveys can be conducted online, via telephone, or in person. They provide quantitative data on consumer preferences, buying behaviors, brand perception, satisfaction levels, and other relevant topics.

2. Interviews: Interviews involve conducting one-on-one conversations with individuals to gather qualitative insights. In automotive market research, interviews can be:

• Structured (following a predetermined set of questions) 
• Unstructured (allowing for more open-ended discussions)

Interviews can be conducted with consumers, industry experts, or stakeholders to gain in-depth understanding and subjective opinions.

3. Focus groups: Focus groups involve gathering a small group of individuals (typically 6-10) in a controlled setting to discuss specific automotive topics. A moderator guides the discussion and facilitates interactions among participants. Focus groups provide qualitative insights, opinions, and perceptions about automotive products, marketing campaigns, and customer experiences.

4. Observational Research: Observational research involves observing and recording consumer behavior in real-life situations. In the automotive context, this could include studying consumer interactions with vehicles, analyzing traffic patterns, or observing customer experiences at dealerships. Observational research provides valuable insights into actual consumer behaviors and preferences.

5. Concept testing and Product development research: Concept testing research involves evaluating and refining new product concepts or prototypes before launching them into the market. This research gathers feedback from target consumers to gauge their interest, acceptance, and suggestions for product improvement.

6. Data analytics: Data analytics plays a crucial role in automotive market research. It involves analyzing large sets of data, such as sales figures, customer data, social media data, or online reviews, to identify patterns, trends, and correlations. Data analytics tools and software enable researchers to derive insights and make data-driven decisions. Some of the commonly used data analytics tools are as follows:

• SAS
• SPSS
• Excel
• R
• Python
• Tableau
• Market Research Software such as Qualtrics, SurveyMonkey, and SPSS Dimensions

7. Online tracking and Monitoring: Online tracking tools are used to monitor online discussions, social media platforms, forums, and review websites to gain insights into consumer opinions, sentiment, and trends related to automotive brands, products, and services. These tools help researchers understand online brand reputation, identify emerging issues, and track customer satisfaction levels.

8. Ethnographic research: Ethnographic research involves immersing researchers in the consumers’ natural environments to understand their behaviors, needs, and preferences. Automotive market researchers may spend time with consumers, accompany them during their daily commute, or observe how they interact with vehicles to gain deep contextual insights.

The selection of research methods depends on the specific research objectives, target audience, available resources, and desired depth of understanding.

Related reading: How procurement intelligence transforms the automotive landscape

Wrapping up

It can be concluded that conducting thorough market research is crucial for understanding the dynamics, trends, and structure of the automotive industry. Automotive market research enables stakeholders to identify key players, evaluate competition, assess market opportunities, and make informed strategic decisions. It helps automakers, suppliers, dealerships, and other industry participants stay competitive, develop effective marketing strategies, and anticipate market changes.

By staying updated on the latest market research findings, industry stakeholders can adapt to changing consumer preferences, technological advancements, and regulatory landscapes. The knowledge empowers decision-makers to develop innovative products, enhance customer experiences, and seize growth opportunities in the dynamic, evolving, and competitive automotive market.

At Netscribes, we present a diverse spectrum of services, ranging from comprehensive market analysis to invaluable consumer perspectives, all bolstered by our pioneering technological proficiency. Our mission is to equip businesses in the automotive sector with the tools they need to seize opportunities and stay ahead of the competition. Reach out to us today and explore how we can enhance your business ventures.|

Based on insights by Kanika Shukla, Senior Analyst, Netscribes