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There have been ups and downs in the automotive sector during the last decade. The four pillars of the CASE transformation brought significant challenges to the industry. The COVID-19 pandemic also hit hard. It exerted a lot of financial pressure on car manufacturers. COVID-19 has forced car makers to re-prioritize. Greater emphasis is being put on areas with short payback time. With the pandemic now under control, 2021 promises to be an exciting year. Here are the best trends that will shape the automotive industry this year that you need to watch out for.

Mergers and acquisitions are one of the top trends in the automotive industry this year. They are set to rise because of the financial difficulties facing carmakers. Some companies are in severe financial distress and may never recover. Bankruptcy is imminent, especially for those automotive suppliers who didn’t transition to electrification. Those companies experiencing difficulties will try to bargain for mergers and acquisitions. Mergers and acquisitions are the only way they can pump in more capital to their balance sheet. Another trend likely to take shape this year is the growth of electric vehicles. Electric vehicles are set to gain more market penetration. Markets such as the US, Europe, and China are ready for electric cars. The CO2 legislation enacted by the EU is likely to fuel the growth of electric vehicles in Europe. In the US, there is high optimism that the EV tax rebate schemes will be expanded.

Another top trend in 2021 will be the deployment of the autonomous drive. Companies like Daimler, Ford, Honda have plans to release their L3 autonomy this year. Regulations are being enacted to offer regulatory clarity on this initiative. An example is the UN’s regulation about automated lane-keeping systems. L4 will not be actualized this year. It is still a work in progress. Finally, 2021 is likely to see a great revolution in retail and after-sales. Many companies in the sector have not yet adopted online sales. Only Tesla had successfully implemented their online sales platform before the pandemic. During the pandemic, many dealerships were closed. This closure meant that only companies with online sales generated revenue. COVID-19 will thus inspire sector players to shift their retail practices online.