What can we learn from the CADA Summit 2024?

The CADA Summit, which took place on the media day of the Toronto Autoshow 2024 in February, delivered some fascinating insights into the change that’s driving the automotive industry at every level and in every market. As a global tech supplier powering the retail space, Keyloop must be able to adapt to the pace of that change across a range of markets, cultures and geographies. So, what have we learnt about influences driving change in the Canadian market?

EV powers onwards

The Canadian market will see a huge number of EV launches this year. Nissan is launching 19 new BEVs, whilst Porsche also has a record number of new models, including the new Taycan. While many manufacturers are making headway in the EV market, the main concerns for the adoption of EV models in Canada remain:

Climate – Range – Charging

Canada’s long winters and vast spaces, plus the fact that many of the large residential condominiums in the major cities such as Toronto and Calgary have inadequate charging, means that the EV infrastructure needs a significant upgrade. That being said, solid state batteries and hydrogen will be on the horizon very shortly, not to mention synthetic fuel which gets the country to a net zero emission target much more effectively, using the same engines and service stations that exist today.

Another interesting point raised by the panel at the CADA Summit was the need for retailers and their sales teams to adopt a range of different skills to educate consumers on EVs – including its tech, driving dynamics, home charging and apps. And these skills will have to be adapted to fit different consumers. Three key types of prospective EV buyers were identified:

• Innovators, making up 2.5% of the market
• Early adopters, 13.5%
• Early majority, 34%

Each of these sectors will have different levels of familiarity and comfort with EVs, so will need to be approached differently. A recent initiative in response to this, from Porsche, has seen the creation of Experience Centres in major cities, so consumers can find out for themselves what driving an EV is like.

China and EVs

The other key topic for debate was the incoming models from the Chinese manufacturers. Michael Dunne, CEO of Dunne Insights and host of the Driving with Dunne podcast, is a key influencer in this space who has worked in the region for many years. He outlined China’s dominance of the whole supply chain, enabling a more rapid manufacturing process, and shared the following key insights:

1. China is the world’s number one exporter of EV and ICE, surpassing Japan – they are number one ICE supplier in Mexico
2. Chinese brands already have 10% of the EV market
3. China builds more EVs than everyone else combined (Global EV Production 2023, Dunne Insights): 
   • China – 8m
   • US – 1.2m
   • Europe – 2.6m
   • Rest of the world – 500k
4. He recommended the following Chinese brands that retailers should consider for franchise:

• • BYD, Geely Group, SAIC – MG, Great Wall, Li Auto

Retail and AI – what’s the future?

There’s no doubt that AI is having, and will continue to have, a huge impact on every aspect of our lives, including the vertical retail model.

“Companies that have successfully implemented AI are growing revenues 30% faster and with 50% wider margins than companies who are not.”

                                 Richard Potter, CEO of AI company Peak

By understanding how new technology is being used in other retail verticals we can see how it might be used in the automotive industry. Walmart, for example, is deploying AI into vendor negotiations for cleaning services, equipment, and inventory management. Currently they look at multiple factors to determine their product mix – AI will investigate more specifics to provide the perfect product mix for a store.

As we adopt new AI capabilities into our own industry, we have an opportunity to harness data across multiple sources, from physical and digital showroom analysis to heat map footfall, and we can use these to develop and optimise our digital showrooms. Data from retailer systems around cars sold and service intervals will enable a more predictable aftersales experience. We can also use analytics to predict vulnerabilities in parts and maximise cost efficiencies for the customer. In the F&I office, AI will enable seamless collaboration around who is responsible for which next steps – and it will all be managed online.

Preparing for AI

The key takeaway for the OEMs and retailers in the audience was to start planning so they can gain confidence in how to use AI tools in their own businesses. Start building a roadmap of the points where AI can benefit or increase revenue in process, for example through business process automation in finance. One interesting suggestion, though, was to remain AI-informed, rather than AI-driven or AI-led. The tools are useful, but they need to be integrated with a human touch.

The state of the market

Along with electrification and AI, market recovery was a key topic at this year’s CADA Summit. Four leading manufacturers kicked off the day at the Canadian Automobile Dealers Association (CADA) session with strong predictions and a genuine excitement at the new vehicles being launched at the show and throughout 2024 and into 2025. Though these will be largely EV, there are some hybrid models in the launch plan.

At a time when manufacturers are testing a variety of go-to-market models, from direct to consumer and agency to the traditional wholesale franchise model, there is real loyalty from the manufacturers to their retail partners. Overall, the market largely supports an omni-channel approach, using AI, that delivers an improved customer experience particularly when shopping or browsing.

Key takeaways

In summary, the CADA Summit told us:

• The Canadian market remains hugely optimistic despite the softening economy
• AI will be a game changer in this industry
• New models will always be on the horizon, but with technology and data at our fingertips we are well-placed to look after our customers
• The provinces need to work with the industry to ensure the infrastructure supports the speed of EV adoption
• Synthetic fuel could be a key route to net zero emissions