Amazon Prime Day 2024

Carsharing might actually boost auto sales overall

Auto industry analysts often react with doom and gloom about the future when referring to the transition toward autonomous vehicles and increased carsharing in cities. A new Deutsche Bank study fights that prevailing wisdom by claiming the change might actually boost car sales in the long run, Bloomberg reports.

The researchers' forecast agrees with arguments that the rise of autonomous vehicles and other on-demand services would decrease the total number of cars on the road. However, each vehicle would actually be in use far more often in a ridesharing society, they claim. Therefore a car would last just three years before a company would replace it. For comparison, a 2015 study from IHS finds average buyers keep their new vehicle for about 6.5 years, and the average car on the road is 11.5 years old. If Deutsche Bank's reasoning is accurate, there would be a massive increase in how quickly the market churns through cars.

"US sales nonetheless increase under every scenario we've examined because vehicle scrappage is determined by miles driven," the study said, according to Bloomberg. "Each on-demand vehicle will travel more miles (10 to 20 percent more) than the cumulative six to nine privately owned vehicles that it replaces." A major contributor to the additional driving is that these vehicles would often be empty on the way to pick up passengers while driving across a city.

Deutsche Bank's research seems like a win-win for both riders and the auto industry, but other studies predict ridesharing and autonomous cars could decimate sales. For example, an analysis by AlixPartners last year found that each carsharing vehicle would remove 32 personal vehicles from the road and reduce sales by 1.2 million vehicles through 2020.

A Barclays Capital study last year predicted even more dire results. It forecasted that new car sales would drop 40 percent over the next 25 years. The analysts believed that families wouldn't need more than one self-driving vehicle for trips to multiple locations, and ridesharing would take care of back-and-forth trips. It also had a more modest forecast that each shared car would replace nine vehicles.

The rise of on-demand transportation seems inevitable in major metropolitan areas, and a study by ABI research indicates 400 million people could get around by autonomous carsharing by 2030. Unfortunately, contradictory studies like the ones from Deutsche Bank and Barclays Capital suggest that no one is sure how this revolutionary change affects the industry.

Related Video:

Share This Photo X