On April 3rd 2019, Kevin Nolan, Vice President, UX Innovation at Strategy Analytics gave a presentation to the Vehicle Electronics and Connected Services (VECS) conference in Gothenburg, Sweden on the subject of "How Consumer Behavior and Choices will Shape Tomorrow's Mobility Ecosystem".  

Having listened to many interesting and informative technical presentations over the two days of the event, it was striking the extent to which strategic planners within the industry seem to assume that urban transportation will inevitably shift to primarily shared modalities in the medium-to-long term. Concepts such as 'public transportation on demand' assume that consumers will happily migrate away from personal ownership of vehicles towards shared models.  Indeed, the growth of car-sharing and ride-hailing services is being presented by some as evidence that consumer behaviors are leading this trend and that this proves how Millennial Urbanites, especially in Asian cities, "just prefer to share their vehicles". 

And yet, the evidence doesn’t quite seem to support that, at this stage. Car production forecasts continue to show positive growth. Moreover, even though car-sharing solutions have now existed for some time, at the end of 2018 there were still only 260,000 shared cars on the road and a total of 33.5m registered users of car-sharing services worldwide, according to Strategy Analytics' Connected Mobility research practice.

In fact, our recent survey of 5,000 vehicle owners in the US, China and Europe found that respondents who use ride-sharing frequently are actually more likely to say they will purchase a new vehicle within the next two years, not less. There are a number of reasons behind this:

• Availability is a key factor - many users don't want to always have to walk to pick up a shared car or wait for a ride-hailing vehicle to reach them
• When they add up the cost of all of the trips they might take over the course of a week or a month, the cost of car ownership is almost always seen as being more economical
• They are skeptical about whether mobility services can replace their own car in every situation, and
• Even for millennial urbanites, a car becomes essential when they have children

Therefore, we believe that expectations that millennial urbanites will abandon individually owned cars are overstated. In all but the world’s largest, most congested cities, an owned car is still vital for many tasks, and will remain so for the foreseeable future (the impact of legislation and congestion-charging notwithstanding).

For more information about our Connected Mobility supply-side and consumer/UX research, or to arrange a briefing, please contact your nearest Strategy Analytics office.