A study by car retail marketplace and publisher Auto Trader suggests it's a mistake to think that car ownership, or indeed the traditional retail sector, will be a victim of the sharing economy. Auto Trader's bi-annual 'Market Report' shows that most UK motorists (80%), especially younger drivers (86% of those aged 16-21), still want exclusive access to a vehicle. The need for independence (80%), an unwillingness to share (51%) and the pure convenience of a car (48%) were all cited as the top reasons for not wanting to give up exclusive access to a car.
Whilst Uber's fast response time in central London arguably offers consumers a level of independence, the report says that generally these are qualities that ride sharing and driver service models (taxis) struggle to deliver, at least on such a wide scale.
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Auto Trader says that finance, leasing and subscription deals are set to fuel the market for new cars in Britain and the company predicts that within the next 10 years all new cars will be bought via one of these models, challenging the traditional sense of ownership.
It also reveals how the wider economic uncertainty could also play to these new models' favour. As consumers continue to feel the pinch and remain concerned that Brexit will lead to more general price rises (62% of those surveyed agreed), options to gain exclusive access to cars on a shorter and more flexible term will go some way to sustaining the health of the overall car market, the report says.
Auto Trader spoke to 13,500 consumers for its report. The report noted that 98% of motorists who bought a car on finance claimed they owned the vehicle, even though in reality they don't. Auto Trader says motorists seek the comfort and certainty of exclusive access, or usership, and find it hard to distinguish this from true ownership.
New bundled subscription models and more flexible ways to access vehicles will open-up the market, the report says. One in five (21%) consumers are already open to using a less traditional ownership model (cash purchase or PCP). This is a higher trend with Generation Z, those aged 16-21, (35%) who will make up the majority of car buyers in 2040.
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By GlobalDataContrary to speculation that the growth of these models signals the death knell for traditional retail, increased popularity of alternative usership models represent an opportunity for the industry, the report says. They will make car 'ownership' more accessible to more people, will offer manufacturers a new way to get consumers behind the wheel of their cars, and crucially, will complement rather than cannibalise existing retail models.
Auto Trader's Chief Financial Officer and Chief Operating Officer, Nathan Coe, said: "The evolving concept of ownership and the growing spectrum of access models represent one of, if not the most, dramatic shifts in the retail landscape. It also marks one of the biggest opportunities for retailers and manufacturers.
"For one access model to win, it doesn't mean another has to fail; that is, for subscription models to thrive, PCP or PCH won't be required to collapse. However, as consumers increasingly source their cars in the same way they do their music or movies, the route from business to motorist will need to evolve alongside it. Rather than relying on just traditional sales, retailers will need to facilitate the supply of both new and used cars to service providers, as well as providing new types of flexible aftersales, logistics, and infrastructure services that will be required to operate these new models."
Retailers, the report suggests, could support by prepping, cleaning, repairing, and even upgrading cars on behalf of the manufacturer or service provider. What's more, showroom parking spaces and overflow car pounds could also double as distribution centres – car sharers need well-located pick-up and drop-off points.
