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 Researchforecasts 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.
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.
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.
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 who 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 drives. 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.
To learn more about targeted today’s digitally savvy and connected car consumer, download our Automotive and Dealership Marketing Solutions Guide.