[bmw_lover]

Hello BHPians.

In the past 3 months that i became a member of this forum, I have extensively read the material available here and all of us will agree on one thing that the millennial generation is not as enthusiastic or passionate about auto-motism.

Reasons be damned (as i am not here to deliberate over practicality or costs) which have already been discussed here N no. of times and latest in this thread by ChiragM (Global car sales could fall by over 3 million in 2019).

The automotive era portrayed cars as a form of social currency, high net worth status. Cars became an extension of one's personality and character. I still remember when my dad purchased the original V-Tech in 2001, I instantly became the talk of the neighborhood. Every boy wanted to talk to me just so that they could come near the car and have a look inside.

This aura created around 4 wheels opened a no. of businesses and jobs which thrived and cashed in immensely. They even had their champions like Top Gear in TV shows, Geneva auto show in expos. I would like to discuss the future of all the auto related businesses/opportunities like mentioned above that had an amazing run till now (starting around '80s) fuelled by the fanaticism of not only the enthusiasts, petrol-heads or thorough-breds but also the curiosity of wannabes and inquisitiveness of dummies.

Note: This thread is not to discuss the future of businesses that would face a tough time due to transition towards public transport, EVs or FCVs. It's purely about demand/supply gap created due to dyeing breed of enthusiasts, purists and die-hard fans of not only cars but also everything about cars (content, articles, accessories, reviews, modifications, road trips, discussions, analysis). It is also about the gap created due to transition towards need based ownership from desire based ownership which is taking place much quicker than towards the clean fuel vehicles. Basically the slow death of romanticism for all things on 4 wheels.

1. Auto-Magazines: The biggest target audience for Autocar or Overdrive seems to be teen-aged day dreamers or fanatasizers. Ones who need an easy and cheap support system to wind their fantasies. So this should easily be one of the most effected auto business. I mean how many regular joes consult any auto magazine before finalising on their next purchase let alone specially buying one. These magazines are already facing operating hardships as is evident from their ever increasing stand prices.
For hardcore enthusiasts publications like RPM, Overland, Total 911, Hot Rod should always be there as they already operate with a limited fan base to begin with and will be able to sustain themselves at least in the near future.

2. Journalism (Blogs, TV shows): Auto journalism won't be able to manage in the same form as we know of it today. In a bid to stay relevant they will have to re-invent themselves. The new kids are turning away from cars but surely they have plenty of other fashion trends to follow. TV shows will primarily be based on other themes with just an under current of associated auto-motism. How about a travel show with Siddhartha Patankar with relevant cars. Or rather still auto shows might be cosnigned as a small snippet of gadget or tech shows as with the advent of EVs, affordable versions are already giving an increased feeling of them being an appliance.

3. Auto expos: No special comments are required. They are already loosing steam around the world and all of us BHPians are well aware of the fact and their future as well.

4. Detailing shops: Should not be impacted in a foreseeable future. As they are relatively a new phenomena in the country and use of these services is still on an uptrend. Average non enthusiastic Indian too is just waking up to its benefits. Plus there business model will always allow them to detail those futuristic EVs.

5. Accessory/Upholstery shops: Their profitability could be affected but it won't be a survival issue for them. They can always come up with need based new/innovative accessories to keep the car buyers interested in. They can also upgrade their business model to venture into new category of accessories.

6. Motoring events: Goodwood Festival of Speed, Pebble Beach Concours d'Elegance, Track days by manufacturers, Classic car rallies. Unlikely to have any effect in near future as these events are driven purely by enthusiasts and mostly are by invitation only. These events can increase the foot fall at the drop of a hat as the total available slots are already in short supply.

7. Insurance business: Micro-economics says if car ownership goes down then insurance cos. must also face the heat. But i am a firm believer of macro-economic principles. These big private/corporate companies will surely find new ways to keep their premium payments flowing. Also to note that private ownership is going down which is why fleets of ola/uber and rental companies still have a massive room for up scaling. Also the recent enforcement of new MV Act showed that auto insurance penetration is still very low in India which these insurance cos. can capitalize on.

8. Modifiers/Tuners: Should be most effected. This is a special class of automotive business which gets almost all of its business from the proper enthusiast category. An average Indian even if he is a wannabe racer stays away from any serious modification apart from visuals altering body kits.

I would like other members to join in on the discussion and especially comment on the below mentioned two more associated heads on which i remained undecided.

Performance divisions (AMG, //M):

Auto sports (F1, WRC):

[GTO]

Nice thread - thanks for sharing!

Originally Posted by bmw_lover

1. Auto-Magazines: The biggest target audience for Autocar or Overdrive seems to be teen-aged day dreamers or fanatasizers.

A dying breed and most will be extinct in another 10 years. They will be primarily online, but the problem for them is online advertising $$$ don't cover their huge costs. Expect more sponsorship from car manufacturers.

3. Auto expos: No special comments are required. They are already loosing steam around the world and all of us BHPians are well aware of the fact and their future as well.

Slowly becoming irrelevant. I was shocked at seeing how many OEMs are missing the 2020 Expo.

4. Detailing shops: Should not be impacted in a foreseeable future.

These will grow as the current penetration levels are tiny. As of date, <1% of car owners ever opt for detailing, so there is a lot of headroom for growth.

5. Accessory/Upholstery shops: Their profitability could be affected but it won't be a survival issue for them.

Quite difficult. I don't remember the last time I walked into an accessory shop. Dealers give mats, stock sound systems are pretty good, security systems are standard and cars overall are so well kitted today.

7. Insurance business: Micro-economics says if car ownership goes down then insurance cos. must also face the heat.

Will grow. Car ownership might go down, but cars are going to be around.

8. Modifiers/Tuners: Should be most effected.

With faster & faster cars coming out of the factory, their scope will be limited to just remaps and some other stuff for a small percentage of enthusiasts.

Auto sports (F1, WRC)

You mean "Formula Yawn"? I didn't watch half the races this year and still don't feel like I missed anything. It's become too boring.

[veyron_head]

My son is more of an aberration as he shares my enthusiasm for cars one hundred percent. But then, he is only 8 and things could change in the future. But I agree with the OP, that the millennials have very little interest in automobiles, may be because they grew up amid city traffic and chaos a lot more than we did.

Car companies are really changing themselves fast to stay relevant. See the seltos or hector. You couldn't have thought of a car coming with a air purifier from the factory! Hence the associated business that supply accessories and performance additions will lose steam very quickly.

[bipinbn]

What about Independent garages/FNG's ?

I think with manufacturers offering extended warranties and machines becoming more complex by the day, independent garages/FNG's will also see a drop in business.

[DrCar]

Apart from the points already mentioned, I will mention points where business will grow and where it won't.

Where business will grow :
- Self drives or rental car companies.
- App based taxi service.
- Tour vehicles operators: As many would prefer not to drive themselves when planning an outstation visits.
- Battery manufacturers and charging service providers.
- Charging stations or stations where batteries can be swapped.
- With less enthusiasm among auto buyers and good public transport development like Metro trains, upcoming bullet trains, etc. , public transportation will profit a lot.
- Off the shelf genuine parts shops : Parts suppliers similar to MGPs will flourish as maintenance of cars will become relatively easy. (See the reason mentioned below in another section).
- Classic car events : Demand from enthusiasts of future generation will increase as we are the last generation who are actually enjoying the roar of an ICE engine.

Where business will lose :
- Traditional fuel stations: They need to upgrade and provide charging stations facility as well in this transition phase itself. Otherwise they will lose the race.
- Insurance companies : When public transport improves, insurance providers will be at loss since not many would opt for a personal car. Signs are already there when we are compulsorily forced to purchase 5 years insurance policy when purchasing a bike.
- Authorised service centres: As cars will become electric, only the regular wear and tear components will require replacements. On the contrary FNGs will profit as people will prefer service from them because more personal care is assured with less labour cost. Owners / FNGs will just need to buy the required parts from genuine parts shop and replace what is required.


Already motorsports, auto magazines and Auto shows are losing steam.

Off topic: Technology is good but it itself is responsible for loss of enthusiasm among buyers. Don't get me wrong, I want all the available technology within the car which helps in safety but don't want it to take away the feel of driving pleasures. Tech like Autopilot is actually killing the fun.

[Heart_Revs]

Growth maybe observed in web-based aggregates and leasing companies.
Insurance and vehicles servicing may be affected a little as overall volume is likely to shrink.
RTO may rake moolah as commercial licences are likely to grow.

[nasa_hubble]

Nice Thread.

5. Accessory/Upholstery shops: Their profitability could be affected but it won't be a survival issue for them. They can always come up with need based new/innovative accessories to keep the car buyers interested in. They can also upgrade their business model to venture into new category of accessories.

Accessory shops will find it difficult to survive in their existing form due to, but not limited to the following reasons:

OEMs providing Touchscreen AV interface and Harman, Bose, Infinity audio systems in mass market cars. Agreed, its only the top variants but its just a matter of time when they trickle down to lower segments and variants.
This is the cashcow IMHO, for accessory shops. Not to ignore people retrofitting OEM systems in lower Variants.

RTO supplying HSRP in new cars may have already reduced demand for number plates.

Sunfilms: Banned.

External Modifications (Front Bullguards, etc.): Banned.

OTC car care products (Car Perfume, Polishes) are Cheaper to procure online.

8. Modifiers/Tuners: Should be most effected. This is a special class of automotive business which gets almost all of its business from the proper enthusiast category. An average Indian even if he is a wannabe racer stays away from any serious modification apart from visuals altering body kits.

They will survive, IMHO. As the EV cars increase in number we will see more battery and motor swaps (some even to IC cars).
Also we may see more custom software modifications of OS interface of connected cars like we see for computers, phones. So the business model will change but if they adapt well they are here to stay.

One business that will remain strong are the Tyre Shops. I don't see how they can be replaced unless cars start running on rails or magnetic levitation.

[SmartCat]

I think we predict the end of "car accessories" stores every 5 years, but they continue to thrive. Not too long ago, we thought these stores will shut shop because most new cars came with integrated audio systems. But then, expensive cars were equipped touchscreen systems. So many cars owners ditched their old OEM systems for aftermarket touchscreen HUs.

But when mainstream cars started offering touchscreen systems as standard, premium cars came with larger screen, reversing camera with 3D guidelines, Android Auto and so on - and these were available at car accessory stores for customers of older cars to upgrade.

Even in 2019, if your car comes with the latest 7 inch touchscreen system:



You still have the option of upgrading to Tesla style unit:

https://www.youtube.com/watch?v=t3pZ...ature=youtu.be

Long story short, as long as there is innovation in in-car entertainment, there will be a market for car accessories.

[charanreddy]

There will always be boys / men and they will need expensive toys.. i don't see fashion / other soft interests taking the place of hard interests and passions like cars./ Hi tech equipment.

The delivery medium is however definitely going online. Print media / books will become replaced by online content and hence auto magazines like any other magazines like India Today or the economist will go down.... As cars become electric, ICE related services will again go down.. but not the whole of accesories business. Road side mechanics and garages will soon find themselves incapable of handling the tech but other more modern garages will thrive... As vehicles go electric, the barrier to enter the manufacturing will go down and hence we may see a lot more custom shops coming up.. this hasn't got started in india in a big way yet..

[vik99]

We could probably end up with an Apple Vs Others like scenario in the future when EVs become prevalent. EV manufacturers could lock down their vehicles to such an extent that FNGs won't have the tools to service them. Imagine losing warranty on the battery pack because of having a local mechanic fix some minor issue on it. People probably wouldn't take such risks and stick to Authorised Service Centers. As the cash flow from regular sale of wear and tear parts go down, manufacturers will surely find new revenue streams and protect existing streams of revenue aggressively.

As with many new things, the west would have a precedent for our manufacturers to follow. It would be interesting to hear from members of this forum based in geographies where EVs are becoming common if they feel vendor lock-in in EVs could be a real issue in the future.

EVs would lead to a boom in companies that work on battery technology, motors, perhaps even Antivirus companies considering how "connected" these vehicles are!

[GTB]

1. Auto-Magazines:: Maybe hard copies might see an end soon, but e-magazine through an App with all his subscriptions in one place could have a future.

4. Detailing shops & 7. Insurance business: Detailing shops and Insurance companies, I agree with you. These will never receive an impact if EV's are only a future. No matter what you drive on a street, it must be insured. Car detailing is nothing to do with mechanicals. I see many investing in detailing shops.

5. Accessory/Upholstery shops:: Unfortunately, one can not custom build a car in India. We have to pick one from listed variants. Some features we get and some we miss. One will surely head to the Accessory shop for the missed one. As long as this scenario doesn't change, Accessory stores do have a future.

Performance divisions (AMG, //M):: AMG, M, N, ST, RS, GTE, I believe they have a business even with only EVs in the market. Maybe with high-performance Electric motors, larger battery capacity units.

Auto sports (F1, WRC):: F1, I believe this is just like any other sport if traditional engines are dead, I believe they will replace F1 with FE.

[sureshkishore]

Very interesting article indeed!

My neighbourhood (1km radius) had At least 3 local garages, a dedicated body work specialist, a spares and lubricant shop, 3 service centers and 4 two-wheeler workshops till about 10 years back. Now most of them don't exist.

The ones that do are on the verge of closure, except one who had scaled up his business and offers satisfactory one stop solution for 4 wheelers.

The mechanics at those old work shops were heroes of their time.


Feel sad to witness the decline of the passion of our lives.

[audioholic]

Originally Posted by SmartCat

I think we predict the end of "car accessories" stores every 5 years, but they continue to thrive.

Even in 2019, if your car comes with the latest 7 inch touchscreen system:

You still have the option of upgrading to Tesla style unit:

Long story short, as long as there is innovation in in-car entertainment, there will be a market for car accessories.

Though what you say is true, I feel that the scope of accessories and their market volumes will be on a steady decline due to multiple factors. Especially on the electronics and mechanical accessory front. For cosmetic things there will still be fans of chrome and some additional stuff here and there. But if you compare to what all you could add to a typical car in 2009 compared to now, the scope is narrow. The reasons have already been discussed here. So five years from now, you could probably go for a vinyl wrap, aftermarket alloys and so. But the market for aftermarket audio, reverse sensors(now made mandatory), central locking system(almost standard on all cars), seat covers etc are narrowing down. There was a time when the entry level hatchbacks did not even have central locking.

Hence, these businesses will have to undergo a major overhaul in their business portfolio. Perhaps they should look at high quality stuff and cater to a more enthusiastic customer base and real upgrades to a car rather than seat covers and chrome stick ons, which these shops are masters at. From what I see in my trips to JC road once a few months, more and more accessory shops look empty. Earlier it would be buzzing with cars. Now its more of cab drivers who want to beautify their cars in their own ways.

[Sahil]

Originally Posted by GTO

With faster & faster cars coming out of the factory, their scope will be limited to just remaps and some other stuff for a small percentage of enthusiasts.

Agree with all your observation besides this one. Modifiers and tuners have a good scope, IMO.

Very niche but highly specialised workshops dealing with good international brands backed by warranty have grown well in recent times. One such example is Racetech India.
The market maybe tiny but a supercar owner in India today wants more power and most of all more exclusivity. Until few years ago a stock ferrari was exclusive enough. Supercar meets,track days etc are increasing which creates a peer pressure that a stock supercar just doesn't cut it.
Moreover, this business is highly depended on relationships and word of mouth. Once a few supercar owners are satisfied customers they recommend it within their car club network.

[nasa_hubble]

Originally Posted by SmartCat

But when mainstream cars started offering touchscreen systems as standard, premium cars came with larger screen, reversing camera with 3D guidelines, Android Auto and so on - and these were available at car accessory stores for customers of older cars to upgrade.

True that, but there is only a miniscule number of people who will upgrade existing OEM features for few extra bells and whistles at cost. Whereas, if you don't have a OEM equipment altogether, say for a audio system, a shop gets to install a HU, speakers, amp, wiring, etc. This is where the moolah is.

Also the upholstery, with side airbags becoming the norm, that will also see a decrease in buyers.

Long story short, as long as there is innovation in in-car entertainment, there will be a market for car accessories.

Agreed, but innovation is not something everyone can do and that will lead to 'specialist' or 'branded' accessory shops in the long run.

I personally have not visited any accessory shop for the last 4 years or so, whereas earlier it was a yearly pilgrimage.