A new report from industry analysts Frost & Sullivan projects huge growth from a range of financial transactions and in-vehicle experience payments from consumers. It remains to be seen, however, how dealerships might be able to cash in on this new spending.
The report, “Powering Monetizing Opportunities in Global Automotive Retail, Forecast to 2030” predicts huge growth in new revenue streams from consumers with personalized in-vehicle experiences through allied partners. The report’s authors urge OEMs to look beyond the initial sale of the vehicle and periodic maintenance revenue and explore these new revenue streams.
“Digital payments have re-energized the mature automotive industry, helping it generate revenues from experience-centric, rather than purely purchase-based, models,” said Frost Sullivan’s Isaac Abraham, Mobility Senior Consultant. “Companies need to invest in, and develop, pilot offerings in fintech across the automotive value chain.”
The company’s report explores best practices in digital retail initiatives, key digitization opportunities, fintech and blockchain roles and impacts, and key areas for growth in automotive finance, retail and customer experience.
You can check out more on the report here:
The report’s authors say that companies that are eager to grow their revenues in the automotive retail need to consider things such as:
- Partnerships with payment solution providers, such as Google, Amazon, Apple, Alibaba, and Tencent, can provide OEMs with robust digital finance and leasing tools, digital security, and new monetization opportunities.
- Subscription-based business models and investments in digital services powering vehicle/feature subscription capabilities to create a customer experience beyond the initial vehicle purchase stage.
- Active participation in blockchain consortiums will be key to building commercialization opportunities.
“Digital payments are redefining the automotive industry. The automotive payments processing segment is set to grow over $500 million by 2025, with early launches giving companies the edge in building brand loyalty,” noted Abraham. “Digital fintech solutions are the key to catalyzing new business models, opening new revenue streams, and creating attractive investment opportunities within the automotive market.”
As these new revenue models emerge, many Canadian dealers are wondering what role, if any, they will play in selling or capturing revenue from these new services. Canadian auto dealer will continue to follow these developments as they unfold.
