What’s Ahead for Car Sharing?

What’s Ahead for Car Sharing?

          
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What’s Ahead for Car Sharing?

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  • Three Market Evolution Scenarios

    What combination of coverage, value, and trust makes car sharing relevant for a critical mass of consumers, and what would it take to persuade some of them to forgo ownership of their own car? To answer those questions, we formulated three scenarios—which we refer to as disruption, continuation, and evolution—to project the market potential and user base for the service.

    The disruption scenario assumes that a sweeping change in consumer mind-set occurs virtually overnight and coverage mushrooms to meet demand. Rather than viewing cars as status symbols and expressions of the owner’s personality, consumers see them as more or less fungible utilities, the only criterion for choosing one over the other being availability when and where the user needs it. This is our most aggressive projection. The number of people forgoing private vehicles would have a sizable impact on new-car sales, although the necessary growth in car-sharing fleets would constitute a new market opportunity for OEMs. It is also the least likely scenario, because the shift would be massively disruptive, not just for OEMs but also for consumers.

    The continuation scenario is the most conservative and assumes that car sharing will grow at a limited pace and create no major disruptions. Relatively few drivers will forgo ownership, and there will be little impact on sales of new private vehicles. Growth will be highest in Asia-Pacific, where the potential user population relative to the market penetration of car-sharing services is greatest and where the cost of ownership, including license plates and user permits, is high, especially in urban areas. Elsewhere, car-sharing fleets will remain at roughly their current sizes, limiting the opportunity for OEMs to replacement sales. Because consumers are increasingly willing to at least consider sharing and market players are steadily increasing their offerings, we believe the market’s growth will accelerate and therefore regard this scenario as fairly unlikely.

    Most likely is the evolution scenario, which assumes that the development of the sharing economy in general and of car sharing in particular will accelerate, albeit with private ownership retaining its social importance. A growing number of drivers will stop owning cars, but their conversion will proceed at a manageable pace. New-car sales will take a modest hit, but accelerated car sharing and expanded car-sharing fleets, as well as vehicle replacement, will create an opportunity for OEMs.