Changing demands in the automotive industry

In recent years, the amount of travel per vehicle has stagnated or even dropped in many developed countries. Experts have tried to explain this phenomenon which undeniably shows that the demand in passenger cars is about to experience deep structural changes.

Despite the fact that more and more cars are sold worldwide every year (international car sales reached 88 million in 2014, including both passenger and commercial vehicles), car manufacturers must take changing trends in transportation into consideration. By doing so, companies can adapt their strategies to take advantage of new opportunities and meet customer needs more adequately.

The evolution in car usage is noticeable when looking at recent changes in terms of consumer needs. This section will show how some signs can already be decrypted to predict how the market is going to evolve.

The Rise of Carpooling

In a recent report, the International Transport Forum stated that car use is higher in places with low population density and much lower in urban areas. Indeed, in cities, many alternatives to owning a passenger vehicle are available, often at a cheaper price (e.g. public transportation).

Carpooling (a system in which car owners form a group and take turns driving one another to a common final destination) is a good example of a creative new transportation solution. It can reduce the stress of commuting to work as well as provide cost savings.

According to Statisticbrain.com, 10% of Americans carpooled in 2014 and this number will only increase in the future. Certainly, there are opportunities for here OEMs to benefit from this new way of travelling

Other Car-sharing Services

In both Europe and in North America, car manufacturers like Daimler and BMW have already started to cash in on the opportunities created by carsharing. The companies’ carsharing/car rental projects, respectively called Car2go, DriveNow, and the french green car rental service "Autolib" offer a fleet of vehicles available to rent on short notice throughout a city. A driver only needs to register online as a user and then download a mobile app to locate and book the closest car available (usually parked in the neighborhood). Drivers are usually charged per minute driven, although hourly or daily rates may be available. This concept of short-term rental cars and other new alternative car services such as Uber (who just launched its Auto-Rickshaw service in India) have proved extremely popular, and will most likely continue to spread.

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• The emergence of new markets: with the saturation of the automotive industry in richer areas, emerging countries are an interesting market for OEMs.