Researchers suggest sharing economy may increase vehicle sales | Smart Highways Magazine: Industry News

Researchers suggest sharing economy may increase vehicle sales

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Analysts at Deutsche Bank are questioning the “consensus view” that vehicle sales may decline as the world shifts to on-demand, shared and possibly autonomous driving.

Bloomberg is quoting researchers as saying there are a “myriad of misconceptions” about how the “on-demand revolution” will affect automakers, chiefly about their impact on sales volumes.

“The consensus view is that auto sales will decline, and that this will be negative for U.S. original equipment manufacturers,” it quotes Deutsche Bank’s team led by Rod Lache. “We believe that the consensus view may be wrong.”

The researchers in America say that “on demand mobility is likely to be practical and financially attractive in the densest sub-sections which account for around 31% of total households in the metropolitan statistical areas we studied, [and that] within these sub-segments, up to 61% of households (owning 8 million out of 15 million vehicles) may find it financially attractive to switch to on-demand autonomous vehicle mobility services.”

But, the researchers say, this decrease in the number of vehicles on the road will coincide with a much shorter life-cycle for cars because they’ll be utilized much more heavily, on average, than they are now.  The life expectancy of an on-demand vehicle is expected to be just three years; this higher rate of turnover of a smaller fleet would therefore see sales volumes rise.

The report says that sales increased under every scenario examined because vehicle scrappage is determined by miles driven, with each on-demand vehicle travelling 1o-20% more miles than the cumulative six to nine privately owned vehicles that it replaces.

The researchers say that this increase in aggregate mileage is primarily attributable to what they call “empty legs”—that is, the distance on-demand vehicles would travel going between one passenger and another.  For instance, the analysts note that nearly half of the miles that uberX drivers travel in New York City are without a passenger.

Bloomberg says that, if things happen the way Deutsche Bank expects, the car industry will also become less cyclical, as miles traveled, rather than the state of the economy and credit conditions, will drive sales volumes.

 

 
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