Car Sharing and The Auto Industry
Once again, the auto industry is in turmoil. The growing trend of car sharing is posing a serious threat to auto makers. Recent studies forecast that the next decade should see a shift towards car sharing replacing vehicle purchases. This is causing a debate on whether social changes such a car sharing will cause long term threats for car sales.
How Did We Get There?
A recent report by Michael Sivak, transportation researcher concluded that the number of vehicles own by households have been constantly falling.
This report acknowledges a significant decrease in auto sales which could ultimately cause major problems for the auto industry. Contributing to this notion were the growing number of private transportation options available and increased telecommuting by employees. Also interesting to note is the fact that younger people are either getting driver’s licenses later in life or just aren’t driving at all.
More is Better?
With the number of private car sharing companies continuing to grow, studies show more reluctance from people towards new vehicle purchases. This is a growing trend auto makers can’t ignore. As such, companies such as BMW and Mercedes-Benz have launched their own car sharing programs. Certainly, there are more options available for consumers. However, is this growing trend of car sharing hurting the auto industry as a whole?
The End of Rental Cars?
The decision by rental car giant Avis to purchase ZipCar in 2012 sends a strong signal that changes are coming. Compared to the costs of maintaining large rental fleets, Avis has seen profits triple since acquiring ZipCar. Though the company has not abandoned the rental car industry, one can’t help but wonder if they’re planning for the future?
What’s Best For Me?
This decision largely relates to where are you living and what your daily transportation needs are. For example, nearly 60 percent of homes in New York are without a car. What’s more, Washington, Boston, Philadelphia, San Francisco and Baltimore are cities where at least 30 percent of homes do not own a car. If you live in a major metropolitan city, chances are you have a variety of transportation options at your disposal. Still, if you’re like me, you probably detest public transportation and will do almost anything to avoid that headache. I suspect that the growing demand of car sharing services is a strong indicator that people are growing tired of public transportation.