"The Automotive segment is undergoing a real disruption and has ripple effects across industries. It is no longer limited to vehicle manufacturers but is also witnessing the involvement of multiple tech companies. Sustainability would largely shape the future automotive and encompasses electrification and shared mobility as the two most crucial drivers of the sustainable automotive industry.”
The pandemic imposed restrictions and lockdowns gave a big blow to the automotive industry. People stayed indoors, travelled less, and commuted barely. Most of the cars were parked, and hence the demand decreased briefly.
However, more than two years into the pandemic, the automotive is nearing a comeback. The pandemic fuelled the need for individual vehicles, which are deemed safer than public transport.
According to a 2020 Capgemini blog that outlines a survey of customers in Germany, 44% wish to increase their use of private vehicles. But we must notice that the study dates back to a time when the world was still in the initial phase of the pandemic.
During the two years of the pandemic, a lot changed globally. Consumer preferences shifted gears, and emphases fell on sustainability.
The consumer mindset underwent a turning point concerning their vehicle and transportation model.
With new technologies, cross-industry collaborations, tech- savvy features, and sustainability now being a collective priority, things have changed drastically.
Sustainable automotive is gaining significant pace, and shared mobility is integral to this transformation.
Shared modes of transportation are already getting popular. Ridesharing and e- hailing are the most widely known shared mobility models. They are also the most used. According to Mckinsey, e-hailing trips almost tripled in the last four years.
Vehicle ownership is henceforth a trend that may decline in the coming future as more and more individuals shift to shared mobility, given the convenience and cost-effectiveness it provides.
Shared mobility is giving way to emerging business models.
Undoubtedly, the shared mobility market looks promising and will witness exponential growth in the near future. But it goes beyond ridesharing and e- hailing.
Shared Mobility as a concept is fuelling emerging business models like Vehicle- as-a-Service(VaaS) and Mobility-as-a-Service(MaaS) and is also fuelling multiple collaborations.
This particular model offers flexibility and the convenience of having a vehicle. It also amplifies the vehicle experience by allowing end consumers to choose between weekly, monthly or annual plans and augment the vehicle type as they go along. This means vehicle ownership sans overhead costs, with significant room for flexibility. A model that we will see gain more traction in the coming years. This Deloitte report titled “Vehicle-as-a-Service” predicts that subscription-based models will account for more than 10% of new vehicle registrations by 2025.
But what does the model have to offer to businesses?
This particular model may give way to several possibilities. One can even foresee vehicle OEMs becoming vehicle providers to tech-based subscription businesses.
Another emerging model, MaaS, integrates transportation and delivers it on demand. Ride-hailing and sharing businesses fall under this bracket. This model aims to offer mobility as compared to providing a mere vehicle. The real value addition is this model's digitalisation and seamless customer experience.
The MaaS market holds room for plenty of opportunities and possibilities. How this space unfolds is something to look out for in the future.
Shared mobility opens doors to a plethora of possibilities. While still at a nascent stage, it holds tremendous potential. The concept of shared mobility may fuel collaborations between distinct stakeholders. How this unfolds is something that only the future will tell.
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