CHANGING MOBILITY NEEDS

& LIKELY IMPACT ON CAR MAKERS

1. Growth of Shared Economy

Fuel costs

Insurance, MOT, Road tax

Congestion

Parking

The Wider Trends…

2. Increasing Cost of Car Ownership

3. 66% of the world’s population is predicted to live

in urban areas by 2050 [1]

[1] UN, 2014

Each car sharing vehicle has the potential to remove 15personally owned vehicles from the road [3]

[2] RAC Foundation, 2012

Each car owned is used just 4% of the time [2]

[3] The Economist, 2012

In Germany over 1m customers

were registered at the beginning of this year [5]

[4] Transportation Sustainability Research Centre at U.C. Berkeley[5] Federal Ministry of Transport and Digital Infrastructure

As of January 2014, 24 U.S. car sharing programs

claimed 1.2m members [4]

Revenue for global car sharing services will climb, from an estimated $1 billion in 2013, to an

estimated $6.2 billion by 2020, with

over 12 million members worldwide [6]

[6] Navigant Consulting, 2013

[7] The World Bank, 2011 (UK figure for 2010)

4-market study / Two different perspectives...

618456

56 13Passenger Vehicles(per 1000 inhabitants) [7]

Consumers across all markets demand safety, flexibility and a stress free journey as

top priorities

What’s most important to consumers when travelling?

High levels of safety

Flexibility to do what I want, when I want

A stress free journey

Most cost effective way of travelling

Shortest possible journey time

Fits with my lifestyle

High levels of comfort

Pride of car ownership

Low environmental impact

Helps to improve the community I live in i.e. reduces congestion

Makes a positive statement about my lifestyle and status

Having internet access throughout the journey

Top 5 ranked items Top ranked item

Highest priorities…

UK US China India

High levels of safety

Flexibility to do what I want, when I want

A stress free journey

Most cost effective way of travelling

Shortest possible journey time

Fits with my lifestyle

High levels of comfort

Pride of car ownership

Low environmental impact

Helps to improve my communityi.e. reduces congestion

Makes a positive statement about my lifestyle and status

Having internet access throughout the journey

UK US China India

Lowest priorities…

Bottom 5 ranked items Bottom ranked item

Car Sharing firms place eco benefits at the centre of their

communications

What do consumers think of

CAR SHARING?

21%

41%

17%

20%

1% Used a car sharing scheme / car club before

Familiar with it, have considered it but have not used it

Familiar with it but have not considered it

Aware but I am not familiar with it

Unaware

% stating

Total Sample (n=1043)

79%

Globally, a fifth of consumers have considered using car sharing

schemes

25%

37%

22%

15%

1%

% stating

(n=259)

33%

34%

22%

10%0%

12%

45%

10%

33%

0%

15%

47%

13%

24%

1%

(n=264) (n=258) (n=262)

85%88%67%75%Used a car sharing scheme / club

before

Familiar with it, have considered it

but have not used it

Familiar with it but have not

considered it

Aware but I am not familiar with it

Unaware

Stated awareness (& consideration) is subject to clarity of terminology

Many consumers are confused by the concept with

multiple competing platforms and concepts

Varying terminology in the media perpetuates confusion:

Car Sharing

Car pooling

Fleximobility

Self-Drive

Car Club

On-demand rental

What aspects have greatest impact oncar sharing choice?

Vendor Operating Company

Pick up and drop off

Mileage Charge

Hourly Charge 23

15

15

14

9

12

12

13

19

18

17

14

15

4

Pre-Booking Requirement

Membership Fee

Vehicle Brand

20

20

18

13

12

12

5

42

9

8

8

16

9

8

FlexibilityNot practical for my lifestyle

Public Transport Preferrers

The Expense

Barriers to consideration - Functional

Those who cannot see a cost benefit in using a car vs.

public transport

Those needing reassurance their car is available to them at all times

Families, transporting large numbers of people perceive car

sharing as not practical

Those placing low value on private car transport and are happy using public transport

Shared access does not facilitate the emotional connection many

consumers have with their car, or pride of ownership

Barriers to consideration - Emotional

Car ownership equates to freedom

Without full understanding and confidence in the concept/service, consumers seek to

avoid the risk,Particularly prevalent in China

Emotional attachment with car

FreedomVenturing into the Unknown

What do consumers think of OTHER

ALTERNATIVE TRAVEL SOLUTIONS?

Alternative travel solutions

Mobility program calculating the most efficient journey, combining driving and public transport, within a city or region.

Select from a wide range of vehicles, services (car cleaned, pick up and drop off, chauffeur) and accessories e.g. bike rack. Fixed price for a period of time.

Car drivers on certain journeys are matched with others wishing to share the journey and share the cost.Matching is done via virtual notice boards.

A travel planning platform combining all modes of transport, (car hire , public, air and rail), for travelling across borders and regions.

A service that lets you rent out cars from other existing car owners for short periods of time.

A community-driven effort - The provider works out demand for door-to-door rides and then organises group transport .

Mobility Package

Ride sharing/

car poolingMulti-modal

Cross-border/interstate

multi-modal

Peer to Peer car

sharing

Community

Transport scheme

Mobility package

Ride sharing/ Car pooling

Multi modal

Top 5 ranked items:

Cross-border/interstate

multi-modal

Peer to Peer car sharing

Community transport scheme

Car sharing /car club

Owning a car

Most cost effective way of travelling

Flexibility to do what I want

Shortest possible journey time

High levels of safety

A stress free journey

At present, car ownership still perceived best at addressing needs

30% -2% -6% -9% -3% -6% -11% 6%

38% -4% -7% -13% -5% 1% -10% 1%

36% -1% -4% -6% -7% -3% -13% -2%

23% 0% -5% 2% -4% -10% -8% 1%

29% -1% -3% -10% -5% -3% -7% 1%

SUMMARY

SUMMARY: CAR OWNERSHIP IS STRONG, BUT NOT STABLE

Car ownership culture and appeal still very prevalent

However, pain of urban transport , cost of ownership and shifting attitudes among Millennials will see an increasing shift towards car sharing

SUMMARY: ALTERNATIVES HAVE AWARENESS BUT CONFUSE

Four-fifths of consumers are aware of car sharing

Most popular car ownership alternatives:

• Car Sharing

• Community transport scheme

However, significant confusion exists around different sharing / mobility concepts

SUMMARY: KEY MESSAGES NOT ALLIGNED VS. NEEDS

Choice driven by personal agenda – cost, convenience, freedom

Social & Ecological benefits are less important – yet often central in car sharing communications

Messaging needs to position car sharing as a liberating experience,

- focusing on seamless, effortless integration of car sharing in daily life

AUTO IMPLICATIONS

AUTO IMPLICATIONS: THE DEATH OF THE CAR IS NOT IMMINENT

Increased car sharing will not necessarily translate into fewer car sales…..

• Integrating cars in multimodal mobility will likely see cars being used in more types of journey

• In developing countries, car sharing will accelerate access to large parts of the population long before they can afford car ownership

AUTO IMPLICATIONS: CRM HOWEVER, IS UNDER RISK

Car brands may no longer own the customer relationship…..

• Brand touch points limited to the product experience itself – sales / aftersales are handled by car club

• What happens to CRM without the CR?

AUTO IMPLICATIONS: CHANGE IN SALES DYNAMICS

Purchasing power of cars will become increasingly centralised…..

• Car clubs will buy volumes, eroding profit margins

AUTO IMPLICATIONS: SHIFT IN CAR CHOICE DRIVERS

Increasing focus on low running costs by car clubs will change how cars are chosen…

• Low running / repair costs likely to become a critical choice factor in car club fleets

• Will pressure on viability of less frugal drivetrains / bodystyles see the market consolidate?

AUTO IMPLICATIONS: BRAND VALUE WILL REMAIN KEY…

Brand value (and relevant positioning) to remain key to growth despite a period of transition…..

• As car access is eventually commoditised brand value will resurface as a critical differentiator among sharing schemes

Thank You