How the rising trend of car sharing impacts the automotive industry | IOL Business Report

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OPINION: Car manufacturers will have to tailor their brands to niche markets and associate their products with a specific service to remain relevant, writes Kobus van Staden.

JOHANNESBURG – The shift towards vehicle sharing and away from the traditional car ownership model is driven largely by millennials and post-millennials, who demand products and services that are entirely different from those that were desired by previous generations.

The new generation’s push for comfort, flexibility and ease of use, coupled with a rejection of long-term financial commitment, means this is a demographic that does not need or want to own a car. Instead, they want to consume transportation as a service. Frost & Sullivan notes that owning and driving a vehicle are no longer central themes in the mobility landscape, with the number of young adults in the UK with driving licences falling by 40 percent since the 1990s.

In a separate study, the same research firm notes that in 2017, the global car sharing market had about 10 million people using these services and predictions are that by 2025 this number will reach 36 million, which is a growth rate of 16.4 percent a year. Uptake of services such as Uber, Lyft and Bolt has been particularly strong in urban settings, where people live relatively close to their places of work, shopping malls and entertainment centres and only require transportation over short distances.

 

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