While sharing cars likely means slower growth of vehicle sales, it also suggest strong new opportunities for automakers, suppliers, and many more players.
The increasing popularity of shared mobility will slow global vehicle sales but not reverse them. Although there likely will be fewer new vehicles on the road because of sharing, car sales in developing countries will outpace shared mobility’s impact over the next 15 years.
Still, through 2030, roughly a third of the expected increase in vehicle sales from urbanization and macroeconomic growth likely will not happen because of shared mobility.
Nonetheless, the shared-mobility story isn’t all bad for the industry, especially if automakers, suppliers, and the other mobility players take steps now to position themselves for it.
Vehicle sales will outpace the impact of shared mobility primarily because of strong expected growth in Asia and the high replacement frequency of shared vehicles due to their high utilization. Research also suggests that shared mobility will only partially replace car ownership. A 2017 McKinsey survey reveals that 67 percent of all US respondents prefer driving their own cars over using ride-hailing apps, and 63 percent aren’t interested in trading their vehicles for shared-mobility rides—even if they’re free.
While the shared-mobility industry remains embryonic, its new players are already over-taking some much larger automakers with respect to market valuations, suggesting strong investor support.
Sizing the shared-mobility market
In three core regions—China, Europe, and the United States—the shared-mobility market was nearly $54 billion in 2016, and it should continue to experience impressive annual growth rates in the future. Under the most positive scenario, which involves strong customer demand for self-driving taxis or shuttles (so-called robo-taxis or shuttles), in low-density locations and in cities that take steps to enable them, the market could see 28 percent annual growth from 2015 to 2030. Even the least aggressive scenario points to steady growth based on convenience and economics; it projects 15 percent annual expansion, even if customers do not readily adopt robo-taxis and cities do not support them.
Currently, China and the United States are the two largest markets for shared mobility, at $24 billion and $23 billion, respectively. Both markets are dominated by e-hailing players, which hold market shares that exceed 80 percent in each country. Europe’s market, on the other hand, is much smaller, at just under $6 billion, and leans toward car sharing with a more fragmented landscape (cities regulate sharing individually, and the business is more asset intensive).
One insight that’s already apparent from the industry is the lack of a one-size-fits-all mobility model. That means participants need to conduct market segmentations at the city level. Berlin, for example, runs on convenient car sharing, with multiple players and limited e-hailing opportunities because of taxi-related regulation. Meanwhile, Beijing, a mid-income, densely populated city, has a shared-mobility market of more than $700 million. Focused mainly on a strong e-hailing platform, Beijing is a winner-takes-most market where one company controls nearly the entire market.
Read more of the original article at McKinsey&Company