Summary: Is this the Era that Ends Car Ownership?

car ownership

We recently read an article from the Wall Street Journal that resonated deeply, posing that intimately mind-shifting question that we know is running through almost everyone’s head these days: is this the era that ends car ownership?

While car ownership stood strong at the cornerstone of the North American lifestyle for decades, in-part epitomizing what we know to be the “American dream,” this lifestyle component is now quickly on it’s way out and one thing is for sure:

“Ride sharing and self-driving vehicles will redefine our relationship with cars. Auto makers and startups are already gearing up for the change.”

Drivers: No More Permanent Arrangements Needed

car ownership declining stats

Car ownership is rapidly declining, and what was once a symbol of freedom is now a hinderance and a responsibility that isn’t required. With ride sharing and carsharing growing in popularity, people will only become more comfortable with the shared economy, leading to a further decline in car ownership. One-quarter of miles driven in the U.S. may be through shared, self-driving vehicles by 2030, according to an estimate by Boston Consulting Group.

Big auto makers: coming to terms with carsharing and ride-hailing

The biggest car manufacturers are realizing the threat of new ownership models like peer-to-peer carsharing, and other on demand services like station-based carsharing and ridehailing. In response to this threat, they are planning how they can pivot their business model to be able to offer the new mobility services that are gaining popularity.

For example, Toyota’s Lexus brand is testing payment plans that allow consumers to subsidize their car purchase by renting them through a peer-to-peer carsharing service called Getaround. Like the Airbnb for car ownership, this service allows consumers to get back some of the costs involved in private car ownership when their vehicle is going unused.

As a result of both driverless cars and fleets of robot taxis, sales of conventionally purchased automobiles may likely drop. What’s more, because autonomous cars will likely be designed to be on the road longer with easily upgradable or replaceable parts, the results could be devastating to auto makers that have built businesses around two-car households buying new vehicles regularly. Currently, cars get replaced every 60 months on average, according to Experian.

New Business: Autonomous Vehicles

autonomous vehicles to decrease car ownership

According to this article, autonomous vehicles could free up more than 250 million hours of consumers’ commuting time every year, which completely changes a passenger’s experience during a commute. We at movmi believe that the autonomous movement has the opportunity to not only alleviate commuting times, but also increase the number of passengers per vehicle. 

Without the need to market the exterior of a vehicle for the purpose of a personal purchase, manufacturers will focus on the interior of the vehicle and its comfort.

Other companies are working on ways to make cars recognize passengers’ digital profiles and become more responsive to their needs. That might involve things such as reminding someone that a calendar appointment is coming up, and nudging them to leave earlier that day, or giving advice on places to eat along their route or ways to shop online while in traffic.

How do you think the decrease in car ownership will change our cultural values, particularly in North America? We’d love to hear your thoughts! Contact us here.

Read the full article here.

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