Seasonality in the Automotive Sectors

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We are certainly familiar with seasonal trends in the food and retail industries, where demand is largely driven by fashion and fads or specific factors such as harvest times, holiday periods and weather conditions.

But what about the automotive industry? What are the seasons that impact motor vehicle sales?

Seasonal Demand

The automotive industry in the US and UK experiences two peak seasons, with the demand for motor vehicles increasing in the spring and autumn months. During these periods of peak demand, the average sale price of cars can rise by up to 15 percent. This is partly explained by the fact that manufacturers customarily introduce new models of automotive inventory stock at this time of the year.

After these peaks however, motor vehicle sales traditionally fall to their lowest levels for that business year. Car sales drop dramatically as the retail sector begins to experience its considerable holiday season sales surge, leading consumers to make large expenditures of disposable income elsewhere.

The reality is that both the new and used car segments tend to experience the same seasonal ups and downs in sales volume, so manufacturers of new vehicles are only able to target a specific buyer segment.

With these seasonal trends continuing to hold true, and despite dealers offering some of their best buys during the winter months, seasonality is a major contributor to a dealer’s ability to move inventory stock off their lots.

The one exception to the slump in motor vehicle sales during winter months is in the market demand for 4×4 sport utility vehicles. In contrast to other motor vehicles, four-wheel drive and all-terrain vehicles experience a surge in demand during the winter season.

Global Competition

The significant inroads that Japanese vehicle manufacturers have made into the US market over the last few decades are one of the biggest changes to the local US automotive industry. The reason for the success of Japanese vehicle manufacturing is in part, due to their miles or kilometres per litre/gallon capability.

Prior to the government regulations dictating manufacturers produce more fuel-efficient motor vehicles, Japanese automakers were already offering much better gas mileage than any US auto manufacturer, putting them well ahead of the local US competition.

Trends in Innovation

The acceptance of autonomous technology has grown rapidly over the short-term with consumers in the US and UK markets now more positive about the safety of self-driving vehicles.

Electric vehicles however, are less encouraging, with both UK and US consumers still favouring petrol or diesel engines. This is largely attributed to the escalation of operating costs and a lack of charging infrastructure for electric vehicles.

The Season for Cloud

Cloud technology continues to be an ongoing trend in the automotive industry, transforming every aspect of automobile manufacturing. Including design, operations and augmented activities that optimise processes and services, helping to reduce costs and eliminate waste.

In addition, blockchain capabilities are also emerging as a solution to rectify the issue of counterfeit parts which pose a major challenge to the automotive industry. Blockchain commands transparency and helps to improve overall pricing strategies and eliminate imitation parts, which will potentially facilitate reasonable pricing within the entire automotive industry.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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