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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    We ran a simulation based on the evolution scenario to determine the impact of car sharing on new-car sales in Asia-Pacific, Europe, and the US. We found that, given the necessary value, coverage, and trust, car sharing would decrease purchases by 792,000 vehicles worldwide in 2021—the equivalent of slightly more than 1% of projected unit sales of 78.4 million new cars in markets where sharing is available.1 The greatest number of lost sales would be in Asia-Pacific, where some 462,000 vehicle owners would forgo a new-car purchase (1.2% of 2021 projected sales). Sales in Europe would fall by some 278,000 (1.3%), while US sales would shrink by 52,000 (0.3%).

    Local and regional trends affect the penetration rate of car sharing. In Europe, for example, municipal authorities strongly discourage driving in city centers, which creates a disincentive for ownership. The changing consumption habits of young Europeans also foster the growth of car sharing. Older people, however, who are the largest customer segment for new-car sales, are unlikely to get rid of their private vehicles.

    The US is different. Because residents of the country’s sprawling and sparsely populated interior regularly drive long distances, the potential for car sharing is almost nil across most regions. Car sharing stands a much better chance of catching on in densely populated urban centers such as Boston, New York, and San Francisco. But the comparatively low total cost of vehicle ownership and the convenience of driving one’s own car will encourage many people in the US to purchase a new car rather than forgo ownership.

    China presents a mixed picture. In tier 1 cities such as Beijing, Guangzhou, and Shanghai, young people are turning away from car ownership because of congestion and the difficulty and cost of obtaining a license plate. In lower-tier cities, however, private cars remain a potent status symbol for the emerging middle class. Nonetheless, as both business and private travel steadily increase, many people will opt for the convenience and flexibility of car sharing and other innovative mobility options.

    Japan has more limited potential as a car-sharing market. Although young people in urban centers are increasingly turning to car sharing, middle-aged and older drivers are reluctant to give up their private vehicles. That dynamic places a low ceiling on the market’s growth.

    In general, we believe that car sharing is likely to penetrate deepest in Europe, followed by Asia-Pacific, although Asia-Pacific will require a larger fleet size.

    We expect that there will be sizable car-sharing offers in Australia, Canada, China, Europe (including Russia and Turkey), Hong Kong, Japan, Malaysia, New Zealand, Singapore, South Korea, Taiwan, and the US.