The automotive industry has always been known for innovation, but the next decade is predicted to bring even more significant changes than the last hundred years combined. From electric vehicles to direct retail, customer data aggregation to tech layoffs, it seems the automotive landscape is constantly evolving.
As someone who works closely with investors, I can attest to the gravity of their decisions. Private equity firms, chief product officers, and CEOs seeking capital are all facing tougher decisions than ever before when it comes to investing in the automotive industry. Experience and intuition are essential, but they're not enough on their own.
What's missing is objective market research and a predictive position on the future. It's surprising how many high-stakes decisions are still being made based on anecdotes. Where are the facts and financials on the market segment and competitive landscape? What's the customer value of a new feature or initiative? Pressing your team for real numbers and objective data is essential.
Spotting trends is one thing, but understanding the timing of material impact is much harder. Simple extrapolation from the last quarter rarely matches reality. Monitoring major trends and predicting when changes will matter to your business is critical to your investment thesis in 2023.
Steve Greenfield's recent book, "The Future of Automotive Retail," and his Retail Risk Assessment tool are both solid examples of forward-thinking. Talking with people at OEMs, dealerships, and software companies has already increased my own learning by 10X. Widening your circle can be eye-opening, as second-order impacts of trends are already popping up.
There's no value in stewing in a bucket of fear and uncertainty. Instead, resolve to acquire real data, make a defensible forecast, and take action now to win in the predicted future. Whether you're a private equity firm or a CEO seeking capital, understanding the market and staying ahead of trends is essential to success in the automotive industry.