Ownership or pay-as-you-go, who wins?
September 17, 2019
RESEARCH REPORT
In brief
In brief
- Car sharing services are growing in popularity around the world, which raises questions about the future of car sales.
- Our research reveals that, right now, most customers still expect to own a car in the future. But this will likely change over time.
- OEMs should expect to see almost half of their customers forego ownership for mobility services once autonomous vehicles become available
The perception: Customers prefer to own vehicles
There is a perception or commonly held belief that “customers still want to own their vehicle” But how true is this and how long will it continue for? In other areas of renting versus buying choices, often the user continues to still want some ownership; take the bike rental schemes in cities globally. Many cyclists also opt to own a bike as well as use the rental service. As a result, it is complementary to ownership rather than a substitute.
But, how will things pan out for the automotive industry? We surveyed 7,000 car owners and non-owners in the US, Europe, and China to find out.
Our survey: Preferences vary by market segment
Revealing the differences per region
48%
say they would consider giving up car ownership in favour of using autonomous mobility solutions
According to our survey of 7,000 respondents, 48% of car owners say they would consider giving up car ownership in favor of using autonomous mobility solutions. But this differs greatly from China to the US, and Europe. We outline the differences below, and why OEMs (Original Equipment Manufacturers) such as big carmakers need to start positioning mobility services as a valid alternative to car ownership—particularly in the premium car owner category. Action is needed now.
Expectations for the future
We asked our respondents for their expectations for car ownership when imagining a future of autonomous vehicles. Below are our results, observations and recommendations. We have divided up our results over three categories: Premium car owners, non-premium car owners and non-owners—with our respondents coming from the US, China and Europe.
Results per category of owner
Who thinks they’ll own in the Future?
Premium car owners
Premium car owners very much expect to own a car in the future: 98% respondents said they think they’ll still own a car.
Non-premium car owners
Non-premium car owners are also positive about ownership; 96% of non-premium owners said they’d still own a car in the future.
Non-owners
Interestingly, current non-owners are also expecting to own a car in the future: 79% of non-car owners said they think they would.
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Share of respondents that think they will own a car in the autonomous future
| NON OWNERS | PREMIUM OWNERS | NON PREMIUM OWNERS | |
|---|---|---|---|
| US | 86% | 97% | 95% |
| EUROPE | 66% | 97% | 94% |
| CHINA | 91% | 99% | 99% |
Who would give up their car?
Premium car owners, over half will consider mobility. Of our share of respondents, 39% of premium car owners in the US say that they would consider giving up ownership in return for autonomous mobility solutions. That increases in Europe where up to 55% of people say they too will give up car ownership for mobility solutions. While in China it is highest with 78% of Premium Car Owners saying that they would consider giving up ownership for autonomous mobility solutions. A massive 39 percentage points difference from the US.
61%
of premium car owners would give up car ownership
43%
of non-premium car owners would give up car ownership
Non-premium car owners are less likely to give up. In the US, only 21% of non-premium car owners say that they would consider giving up ownership in exchange for autonomous mobility solutions. That’s 18 percentage points less than premium car owners. While in Europe 41% of non-premium car owners say they would consider giving up their car for autonomous mobility solutions – a difference of 14 percentage points to the premium car owners. While in China, a massive 69% of non-premium car owners say they’d give up ownership for autonomous mobility solutions. That’s only 11 percentage points less than the premium owners.
Our observations
The risk of losing customers to mobility is high
Put simply, our results show that the transition from car ownership to mobility-as-a-service seems inevitable. The risk of losing customers to new mobility service providers is high once they establish mature service offers.
The risk of losing customers to new mobility service providers is high once they establish mature service offers.
The key is to identify future value pools and calculate the investments that are necessary to tap into them. Questions need to be asked, such as: Is it worth it to keep trying to sell vehicles to customers who are ready to jump into services altogether while risk losing them to service providers?
Our recommendations
Fully embrace alternatives
OEMs need to finally fully embrace alternatives to the ownership model instead of just experimenting with them if they don’t want to lose the grasp on their customers.
USA
Most US customers still want to own a car. OEMs in the region can therefore continue to focus on sales and aftersales margins for a foreseeable time, and offer mobility services later.
Europe
Similar to US customers, Europeans still prefer to own their cars. But they seem slightly more ready to embrace mobility services. OEMs should begin preparing rather sooner than later.
China
OEMs in China need to act now and aggressively push alternatives to ownership since a vast majority of customers is already willing to substitute ownership for mobility service models.
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Recommendations for premium car OEMs
In general, premium-brand car owners across US, Europe and China, are more willing to reconsider owning a vehicle. Since the existing premium customer base is more willing to give up ownership in all markets, the urgency for action is higher here. There’s no time to wait around.
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