If car-sharing, ride-hailing and car-subscription services were as widely available as traditional car ownership through purchases and leases, consumers would rely “significantly less” on traditional car ownership and new-vehicle retail sales could tumble much as 29 percent.
Conversely, fleet sales would increase.
So predicts Phase 3 of Cox Automotive’s Evolution of Mobility Study, outlined Sunday as part of a press briefing here, just prior to the opening of the North American International Auto Show. The study is to be released publicly today.
The goal of the study is to shed light on consumers’ transportation choices and how those choices impact retail automotive, said Isabelle Helms, Cox Automotive vice president, research and marketing intelligence, who presented the study’s findings.
“The advice for our customers — that’s manufacturers, it’s lenders, it’s certainly dealers — is to explore these new alternatives,” said Helms.
“We learned from Phase 1 that increasingly more consumers tell us that while having transportation is absolutely necessary, owning a car is not. This latest research uncovered for us that one-third of consumers are very interested in exploring these alternatives and 36 percent of consumers told us they’d like to have fewer cars sitting in their garages today.
“I think we’re at a point in time where consumers are very open to alternatives.”
The first phase released in August; Phase 2 was released in October.
Phase 1 was based on responses from 1,200 consumers.
The second phase surveyed 400 dealers. It revealed that dealers “are very in tune with what is happening in the world of mobility” and are open to offering alternative transportation to consumers in their dealerships, Helms said.
Evolution of Mobility Phase 3
In Phase 3, 2,100 consumers were shown 12 vehicles from which they could choose.
The vehicles were presented in several scenarios such as transportation method, such as car-sharing, car-subscription service and traditional ownership and with monthly prices, which included insurance in the case of subscription services and traditional ownership.
The vehicles were also identified as luxury or non-luxury and domestic or import.
The study revealed that 93 percent of the miles traveled by consumers are in personally owned vehicles, Helms said.
Public transportation accounted for 4 percent of miles traveled and the remaining 3 percent was split among car-sharing, ride-hailing and vehicle subscription services.
But when participants were asked to make transportation choices under the assumption that all mobility alternatives were available to everyone, total miles traveled in personally owned vehicles would decrease to 72 percent and new-vehicle retail sales would drop approximately 6 percent, the study predicts.
Cost drives choices
Almost half of the consumers in the study — 48 percent — said owning and leasing a car is becoming too expensive.
So not surprisingly, when consumers make choices about transportation, cost is the biggest driver, and as the projected cost of alternative transportation dropped in the study, so did the proportion of miles traveled in personally-owned vehicles, Helms said.
The study determined the average cost per-mile traveled for personal car ownership was 50 cents, ride-hailing was $1.30, car-sharing was $1.50, and car subscription was 80 cents.
The study projects that when alternatives drop to an average of 60 cents per-mile traveled, the share of miles driven in personally owned vehicles drops to 61 percent and new-vehicle retail unit sales drop by 29 percent. “Big assumptions here, but we wanted to show some of the extremes that were uncovered,” Helms said.
The study also predicts that Millennials — born between 1981 and 1996, according to Pew Research Center — and the following generation dubbed “Gen Z”, will be the first to adopt alternative ownership models with car subscriptions leading the way.
The study found that car subscription’s current share of miles driven is 0.2 percent, but increases to 9.5 percent when consumers assume its wide accessibility.
Accessibility is the biggest barrier to subscription adoption, the study said, followed by personal ownership preference and then cost.
Current share of miles driven for ride-hailing stands at 2.1 percent and car-sharing is 0.5 percent.
But when consumers assume wide accessibility, ride-hailing drops to 1.3 percent and car-sharing increases to 1.1 percent.
The sustainable future of transportation
Also in the shadow of NAIAS was a separate panel discussion: “The Sustainable Future of Transportation,” hosted by Deloitte’s automotive practice on Tuesday.
Panelists focused on how they believe mobility will function in real cities for real people in the future.
Kim Pittel, group vice president, sustainability, environment and safety engineering at Ford Motor Co., was among the panelists. She believes that personal ownership of autonomous vehicles is more than a decade away because they won’t be affordable.
“But 10 years out I think we’re going to be significantly more connected,” she said. “So the idea of things being delivered (by autonomous vehicles) if the routes are defined, I think that’s possible.
“We think there’s going be far greater penetration of electrification. So we see it as connected, electric with autonomy to come in 10 years and I do think it’s sustainable.”
Also on the panel was Carla Bailo, president and CEO of the Center for Automotive Research. Bailo hopes “nobody will buy an autonomous vehicle” because the popularity of those vehicles would cause massive traffic congestion and “bottleneck the city.”
“We need to shift from personal ownership into a shared ownership; that’s the only way we’re going to combat the congestion,” Bailo said.
She also said some auto companies have instituted cost-cutting measures in anticipation of another cyclical economic downturn, but even if these companies have less money to invest she doesn’t believe mobility will fall by the wayside.
Bailo predicts there will more partnerships, such as the one between Ford Motor Co. and Volkswagen AG announced on Tuesday. The companies agreed to build pickups and vans together and signed a “memorandum of understanding” to investigate collaboration on autonomous and electric vehicles and mobility services, according to Tuesday's press announcement.
“That way you can share the burden for this development,” Bailo said.