Skip to main content Skip to Footer

LATEST THINKING

Car sharing service outlook in China

The car sharing will change the car usage habits of consumers and create "more rules of the game" across the sector.

Overview

With an increasing awareness of car-sharing services among Chinese consumers, many auto manufacturers are also considering to explore this space. Chinese consumers, however, are different from their counterparts in mature markets in terms of car usage habit, car cost structure and alternative pricing. It is therefore essential for domestic auto manufacturers to think about how to position their car-sharing service and adapt their operating models to the specific requirements of consumers in China.

Background

The car-sharing business started late in China. Car makers, such as Mercedes Benz and SAIC, have already piloted it in both tier 1 and 2 cities. According to Accenture statistics, currently, close to 3,000 shared cars are operating in the domestic market, accounting for 0.2 out of 10,000 of the overall car ownership. In the mature markets, for example, in the United States, car sharing penetration raised to 1 out of 10,000 following a decade of promotion. Accenture predicts the car-sharing fleet size in China to reach close to 10,000 units by 2020.

Analysis

The car sharing is still a new service in China. But many auto manufacturers are eager to provide the service for the following reasons:

  • Transitioning from production to service
    Based on frequent interaction with consumers in providing them car-sharing service, auto makers have turned into service providers, offering consumer travel solutions rather than remaining mere traditional vehicle manufacturers.

  • Enhancing vehicle utilization
    Accenture research shows that the actual utilization of private cars in China is only 7 percent. Car sharing helps raise the utilization rate to 40–60 percent, mitigating the traffic congestion in big cities.

  • Driving collaboration among multiple departments of auto makers
    Car sharing calls for in-house strategic collaboration between multiple departments, including new car sales, after-sale service, second-hand cars, key accounts and financial products, across luxury car manufacturers.

  • Delivering product experience for potential consumers
    Unlike auto purchase that involves tens or even hundreds of thousands yuan, car sharing-which costs less than one hundred yuan-attracts potential consumers to experience the variety of car models, which will help increase the car consumer base.

Suggestion

Based on its deep understanding of the Chinese market and consumer characteristics, Accenture believes the following five factors are essential for the success of car sharing in the domestic market:
City selection and coverage
Government resource support
Car sharing models designed for corporate users
"Chauffeur", a must
Cross-platform cooperation with Internet Companies

The car sharing will change the car usage habits of consumers and create "more rules of the game" across the sector. Auto giants have clearly recognized it as an essential part of the future sharing economy. To achieve success in the Chinese market, enterprises have to develop appropriate strategies, positioning, products and services based on an in-depth understanding of the characteristics of Chinese consumers.