5 Challenges Automotive Industry will Face in 2021

Last Updated: May 26, 2021 By

It is considered that the automotive industry is always emerging and does not face any challenges. But sometimes whatever you see is not the reality. Every sector faces challenges. But you have to prepare yourself to strongly accept and go-through that challenge. Same is the case with the automotive industry. Technology is increasing rapidly, so it always reveals new challenges for the automotive industry. The automotive industry is adopting new technologies such as Artificial Intelligence, Internet of Things, Blockchain etc.

They are considered as the most famous applications of the automotive industry. With the enhanced digitization of the world, the automotive industry is enormously changing. The automotive sector has seen unparalleled twists and turns in the last 10 years. The automotive industry is moving towards the advanced and modern future age gradually. Where automakers find themselves to generate more revenue and sales. But 2020 was quite a harsh year for every industry just because of COVID-19 Pandemic. But the industry is still hopeful to work better and meet all the challenges that 2021 will throw.

1. Artificial Intelligence based autonomous vehicles

AI- based vehicles are becoming the most favorite product of the automotive industry. Artificial intelligence has made travelling smarter and enjoyable with self-driving cars. These cars rely only on sensors and software for navigation and control and do not require any driver to drive the car. It seems like Artificial Intelligence will reduce the need of human drivers and make driving easy. Various studies reveal that there are around 1,400 self-driving cars on the roads of the U.S which is not a huge number, but the changing mindset of people will definitely increase the number of self-driving vehicles. Unfortunately, 2020 was not a good year for all the industries due to COVID-19 Pandemic. But still the automotive industry is giving an array of hope to recover the loss and face the challenges whatever 2021 will toss.

2. Digital marketing and dealing of car buying & selling

COVID-19 Pandemic drastically changed the selling and buying of vehicles. Before coronavirus people used to buy vehicles by in-person visiting the dealership shop, to have a complete overview of the car. But due to COVID-19 Pandemic and the lockdown scenario, online buying and selling of vehicles has increased. But with online sale and purchase things are not exactly the same as they seem. So far, according to few surveys, 81% of the buyers are not satisfied with the online purchase of cars. But things are expected to change in 2021.

3. Electrification

As production of cars is increasing, the increase in fossil fuels and its harm on the environment has changed the thinking criteria of the automotive industry, which means the automakers decided to produce more electric vehicles to avoid pollution and make the environment friendly. There are already a number of electric vehicles on the roads, but in future, there will be higher energy efficiency vehicles on the roads. In August 2020, there were over 1.6 million electric vehicles on the US road, this number is expected to increase in 2025 not in the US but globally as well. Electric vehicles are great in demand and they are expected to come up with solutions based on price, poor battery, renewable energy-based charging grids etc.

4. Blockchain

Blockchain has the ability to change an organization’s process. Blockchain includes sharing vehicles data over a secure network for connectivity and shared mobility solutions. It is used in the verification process to improve efficiency across the supply chain. The date can be utilized to improve vehicle information and usage data across the industry. Blockchain is the easiest way to collect the data and information together in groups or blocks. This will save your data for a longer period of time. Every block has a certain storage capacity and you can save every block with the specific name to keep it in the record. So to avoid missing the data and information, blockchain is the greatest way to keep your data secure.

5. Building brand loyalty

Every business is affected with the increased competition to some extent. The main concern of every business is to remain loyal with the company and the customers as well. But what if, the years of success and hard work will turn into loss and rejection. COVID-19 Pandemic did this to almost every business. The decline in automotive sales is universal. Either you are discussing Mercedes Workshop in Abu Dhabi or a Dealer Garage in Mussafah, the COVID has drastically affected the brand presence. So, every brand must focus on the programs that build brand loyalty. They have to put some efforts to reach the level of success that they have before the pandemic hits the industries. They have to implement the strategies which will overcome the entire loss that COVID-19 brings.


Not only the automotive industry, but almost all the industries have to face some challenges in 2021. As the COVID-19 pandemic hit really hard globally. Artificial Intelligence, Internet of Things, BlockChain, and the production of more electric vehicles have totally transformed the automotive industry. Digitalization and latest technology are the main reasons behind the transformation of the automotive industry. So follow the latest trends and technology of the automotive industry and overcome the challenges that 32021 will toss. Stay focused and active to adopt cutting edge technology and implement productive strategies to face the challenges. If you want to become the leading automotive business, you have to keep yourself aware of the latest trends and technologies, which will help you to face the upcoming challenges.