Impact of car sharing on future of automotive industry

The expansion has been such that TrendForce researchers expect the car sharing users to cross 15 million by 2016. This prediction is a clear indication of a constant increase of the demand for this service. This expansion was mainly seen in Europe and Asia.

Europe has managed to take hold of half of the global market. Asia stands second basically due to China - they do not have public transport arrangements for outside cities and towns and the citizens have to resort to personal vehicles for the trip.

What exactly is this car sharing service? Companies offering this service have their cars all around the city. If we need a car all we have to do is obtain a special card with which we can activate the vehicle and use it. We are charged per minute and that is all we have to pay.

Station independent

Another advantage of this service is that, with some of the companies such as Car2Go, after we are done with the car, we do not need to drop it off to the same place we took it from. We can simply park it wherever we wish, within a certain area. That is, this service is 'station independent'.

The convenience this service offers is admittedly incredible. In fact, it is more convenient than taking public transport and cheaper if more people divide the cost. The usual rental services do not provide us with that much of flexibility. Besides, they charge us for a whole day. What if we want a car only for an hour or even less?

That is where car sharing comes in. Also, there are no taxes or maintenance costs. As Eric Chang, automotive, electronics analyst at TrendForce, says, car sharing has significant cost-performance advantage over other transportation methods, including carpooling. No wonder the business has been continuously expanding and is expected to take over the industry to some extent.

Car ownership is not really desired as much today as it used to be previously. We now understand that just because we need to travel, does not mean that we have to buy a car; that is not always sensible. Lack of parking space in our cities is also becoming a major problem. Inner city driving restrictions also discourage us from making the purchase.

High costs

Besides, buying a vehicle and getting it insured has become difficult and expensive and the maintenance and fuel costs are too much. When we want to change the model or make, we have to go through the trouble of selling it off which is a huge task.

All these issues, and more, make us look for alternatives, of which car sharing is one. It is hoped that this service will reduce the number of vehicles seen on the streets. Parking will no longer be that much of an issue either. And the vehicles will actually be used, considering that not all of us use our cars to the fullest.

While the idea of car sharing seems to be pretty convenient for regular people who have to rent cars on a frequent basis, it can easily prove to be threatening for auto manufacturers. TrendForce has deduced that car sharing will replace 2.34 to 3.38 million private cars around the world by 2016.

These statistics alone say a lot about the future of car sharing and auto manufacturers. The number of vehicles on US highways today exceeds 250 million, and it is expected that this number would go down tremendously and quickly if car sharing continues to grow at this pace.

Every shared vehicle could be a replacement for anywhere between nine and 13 private vehicles. Obviously this is far from good news for auto manufacturers.