Caitlin Harrington, a researcher at Wired recently published an article. She cites an interesting glimpse of what does the future hold for automakers. Since the advent of car-sharing, the rise in the sales of vehicles has stopped. Millennials have shown great interest in renting vehicles. Hence, making companies like Turo and Zipcar extremely popular. This phenomenon of increased interest in sharing the vehicle has not gone unnoticed by the thinktanks of auto manufacturers. Therefore, they have also changed their approach, they have started to invest in car-sharing companies and other programs.
Share, buy, or lease a car: What does the future hold for automakers.
Automakers are making headlines as they are investing heavily in car-sharing and rental companies. Because they know this for a fact that car sales are eventually going to dry up and the only entity buying cars from them are going to be these car-sharing and rental companies. For example, Ford leads a $24M investment in India-based vehicle rental company Zoomcar.
Similarly, German car giants BMW and Daimler have announced a €1 billion investment in a joint ride-hailing and car-sharing business. The automakers say they want to “establish a new player” to rival services from firms like Uber. Like Caitilin cites
Car sharing is projected to grow globally from 5.8 million users in 2015 to 35 million by 2021, according to Boston Consulting Group. “If we’re right, nobody’s going to borrow money to buy a car again,” says Scott Painter, CEO of car-subscription startup Fair. He has reason to be bullish: His company has secured more than $1 billion in funding since 2016. The service connects drivers to used cars at dealerships nationwide, bundling warranty, maintenance, roadside assistance, and optional insurance into one month-to-month, pay-by-app fee (from $150). Pick up your car of choice at a participating dealer and return it at any time with five days’ notice.
Millennials and car sharing
Nielson(American information, data, and market measurement firm) published an interesting insight into the technology driving innovation. The report suggested a lot of interesting points. But for us, the most interesting was the willingness of the millennials to share the vehicles. Goldman Sachs also mentioned their results in their report where they segregated their research. The most important thing that they were able to understand was the millennial mindset, they would share a vehicle rather than buy or lease it and probably this is what the future holds for automakers.
Reference: https://www.wired.com/story/automakers-subscription-car-ownership-optional/
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