Americans are slowly turning away from the concept of car ownership as a necessity and are looking at new options of mobility – car sharing. A study by ABI Research forecasts that 400 million people will rely on robotic car sharing by 2030. Companies such as Zipcar and Uber are already gaining huge market share, steadily growing in popularity as an alternative to vehicle ownership.
Consumers are turning to these alternatives as a means to more efficient vehicle utilization and more affordable transportation. LA Times reporter Jerry Hirsch is on point with his statement, “For at least 22 hours a day most cars sit parked, sucking up their owners’ money while waiting to be driven. For most people, it’s one of their most underutilized — but most expensive — assets.” Consumers are looking for new ways to capitalize on these assets.
Consumers Are Demanding New Options for Vehicle Ownership
While research by KPMG indicates that 32% of all consumers still prefer owning a vehicle versus using shared services, these trends are set to change, especially with younger generations. More than half of millennials in particular report being open to sharing rides with others according to a study from Penn Schoen Berland research firm. And research firm Gartner Inc. estimates that by 2025, 20% of the vehicles in urban centers will be dedicated to shared use.
Additional research by IBM supports these findings. According to IBM’s study “A New Relationship – People and Cars,” 42% of those surveyed would consider alternative ownership modes such as subscription pricing, while another 24% of respondents were very interested in fractional ownership of vehicles. Thirty-nine percent of consumers would consider a car-sharing model and 36% surveyed would choose the on-demand ride-sharing option.
The Mobility Consumers of the Future
In a particularly interesting study by Arthur D. Little, Future of Mobility 2020, seven types of mobility types were identified: Greenovators, Family Cruisers, Silver Drivers, High-Frequency Commuters, Global Jet Setters, Sensation Seekers, and Low-End Users.
- Greenovators: By 2020, they will make up almost 30% of the population. Due to their environmentally-conscious lifestyle, restraint in consumption and luxury are important and will be reflected in their demand for more affordable car options and basic mobility alternatives.
- Family Cruisers: This segment will organize their time around family leisure time, putting new demands on the household’s mobility requirements.
- Silver Drivers: This older generation likes to consume, has a wider range of interests, and are active in their leisure life. Their mobility requirements will gravitate towards vehicles that meet their comfort requirements rather than those packaged as respectable senior citizens’ sedans.
- High-Frequency Commuters: Constantly on the go, networking and meeting customers best describes this segment. They will organize themselves in carpools more spontaneously and at shorter notice and develop a high affinity towards car-sharing and short-term rental car offers.
- Global Jet Setters: Jetting between major cities of the world, as often as several times a week, requires that this segment has mobility options while traveling. They will choose the transport that fulfills the functions of a personal workstation, privacy, and familiarity.
- Sensation Seekers: For this segment of consumers, having “fun while driving” will be an important element of their lifestyle – and they are willing to pay for it with mobility options that offer a fun experience and multimedia connectivity.
- Low-End Users: In the future, a significant segment of consumers will no longer be able to afford individual mobility to the extent that they now do. Rising fuel prices and increasing financial burdens are making mobility more expensive, driving their demand for efficient and inexpensive mobility options.
Opportunities for OEMs
Whatever the car driver of tomorrow looks like, automotive manufacturers need to anticipate consumer demand and respond with the right products and services to meet changing demands. While car sharing seems like a threat for OEMs, the reality is that automakers can place themselves in an excellent position to capitalize on these opportunities. They can take car sharing into account during the car’s design. They can create leasing organizations and dealer networks that specialize in partial ownership and vehicle servicing. And they can reach new drivers and create brand loyalty.
Car sharing and the new age of mobility may reduce the number of cars on the road, but it will also increase mileage as cars are made available to a larger set of drivers. While individual car sales may decrease, larger fleet sales and accelerated car replacement will offer new profitability options.
As we head into a future of car sharing and changing trends in mobility, consumers and OEMs alike can benefit. Drivers have more efficient and more affordable transportation options, and car sharing can open up numerous new ways for OEMs to reposition their brand and implement strategies to maximize the bottom line.
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