One of the first thoughts that comes to mind when talking about ride-sharing and car-sharing is the potentially negative impact that these new mobility trends could have on car sales and the auto industry, in general.
There is a widespread opinion among industry observers and analysts that the increased availability of on-demand mobility services – provided by ride-hailing companies such as Uber and Lyft – is bound to lead to a severe drop in car sales, since they present a practical and affordable alternative to owning a car for many households.
This has been a major reason for concern for global automakers, with many of them having started preparing for a future of declining sales, by developing plans for on-demand mobility services. However, a new report now suggests that the popular concept of sharing rides and cars could actually have a completely different impact on car sales than what was previously thought.
Auto Sales Could Grow Thanks to the Likes of Uber and Lyft
Analysts at Deutsche Bank AG – one of the world’s leading banking and financial services institutions, based in Frankfurt, Germany – have published a report on the impact of ride-hailing services on car sales, and the findings noted in it will surely be interpreted as great news by automakers.
As reported by Bloomberg, the Deutsche Bank analysts claim that the general opinion that car sales will decline as the popularity of ride-sharing rises, is a huge misconception.
“The consensus view is that auto sales will decline, and that this will be negative for U.S. original equipment manufacturers,” writes Deutsche Bank’s team led by Rod Lache. “We believe that the consensus view may be wrong.”
Increased Use of On-Demand Vehicles Boosting Demand
The report states the main reason why a decline in the number of cars in use is expected, but it also notes that overall sales figures are not very likely to see a huge fall. Analysts say that on-demand services using autonomous cars will certainly appeal to many consumers, who will see it as a less expensive and more convenient option than driving their own cars, but automakers shouldn’t worry about declining sales because ride-sharing companies will have to renew their fleets more often, with increased wear and tear leading to shorter life expectancy of on-demand cars.
“On demand mobility is likely to be practical and financially attractive in the densest sub-sections which account for circa 31 percent (on average) of total households in the metropolitan statistical areas we studied (13.2 million households, owning 15.5 million vehicles out of the total),” the team writes. “Within these sub-segments, up to 61 percent of households (owning 8 million out of 15 million vehicles) may find it financially attractive to switch to on-demand autonomous vehicle mobility services.”
Analysts claim that sales in the U.S. will continue to go strong thanks to the fact that on-demand vehicles will be used much more frequently and heavily than individually-owned vehicles, resulting in high turnover rates for ride-sharing fleets, which will ultimately lead to rising sales.
“Each on-demand vehicle will travel more miles (10 to 20 percent more) than the cumulative six to nine privately owned vehicles that it replaces,” the report concludes.