Wednesday, February 5, 2014

AlixPartners Study: Every Car Shared Means 32 Lost Sales

enterprisecarshare

According to a report from consulting firm AlixPartners, each and every car in the Zipcar or car2go car-sharing fleets means 32 lost vehicle sales. Based on a survey of 2,000 adults in 10 major cities who use car-sharing services, the report says that Americans would have bought an additional half million new or used cars and light trucks since 2006 if they did not have access to those services. That figure is expected to grow to 1.2 million by the end of the decade.

"I think this will have a bigger impact on the market than [automakers] think," Mark Wakefield, AlixPartners managing partner, told the Automotive News on Tuesday.

The report expects that the number of drivers using car-sharing services will grow from less than 1 million today to 4 million by 2020.

"Lower costs and lower hassle is driving adoption, not environmentalism or fads," Wakefield said. "So this should not be seen as a fad."

For every car in its fleet, the average car-sharing service has about 66 members, a number that will grow to 81/car by 2020. Almost half of regular users end up not buying a car, the report said.

The study looked at car-sharing in: Chicago, Washington D.C., New York, San Francisco, Seattle, Miami, San Diego, Boston, Portland, Ore.; and Austin, Texas. Car-sharing is expanding, but that growth is currently limited to affluent, urban areas near universities. Should the autonomous car become a reality, though, it could spur dramatic growth in car-sharing.

"The automated car could really be the 'killer app' for car sharing," Wakefield said. "It could be what really blows up the model to escape well beyond what people are looking at today."

Cars in the car rental and car sharing businesses anticipate those changes. Lee Broughton, who is in charge of sustainability at Enterprise car-rental, has predicted a future in which instead of shopping at brick and mortar stores, consumers could order products online and have autonomous Enterprise vehicles deliver them, turning the company into a delivery and expediting service.

City CarShare, a car-sharing service with more than 220 locations in California's Bay Area is also looking forward to autonomous cars and what they could mean for their industry.

"The ultimate way of sharing is to have vehicles that are on demand. Because the idea at least is they could move along with one person or act as virtual buses and things like that," City CarShare CEO Rick Hutchinson said in remarks last year. "It's huge. I don't think it's 30 or 40 years, I think we'll see it much sooner."



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