The automotive market is set to take a dramatic turn as analysts predict a future more reliant on mobility services and less oriented towards car ownership.
In a report tabled by data analyst firm, IHS Markit, the growing ‘mobility’ market will see consumers in India, Europe, China and the United States travelling more distance than ever before at the expense of car ownership.
Technology will be part of the reason for flagging new car sales. The rise of autonomous driving technologies will mean one vehicle will be better able to serve multiple users during a day, reducing the need to own a vehicle that spends most of its time sitting dormant.
2040 is signalled as the point in time where the change will be most obvious with Mobility-as-a-Service providers (MaaS) predicted to purchase over 10 million new vehicles by that time, compared to a relatively paltry 300,000 vehicles in 2017.
“Mobility service companies will be a prime driver of shifting car sales from personal to fleet economics,” Tom De Vleesschauwer, from IHS Markit’s transport and mobility division, said.
“Ride hailing has the potential to be so disruptive because it is often the most convenient for consumers and can significantly increase access to car transport, particularly in markets with low car ownership rates.”
The report also signals a rising battle between regular internal combustion cars and EVs, something already signaled with countries like the UK and France already establishing bans on the sale of internal combustion vehicles by 2040.
Plenty of markets will still rely on internal combustion however, although pure gasoline and diesel propulsion is expected to take a back seat to hybrid systems or some degree of electric assistance.
That will result in the market share for oil declining, though not as dramatically as might be expected with a petrol and diesel still expected to make up around 62 percent of 2040’s new car market for the regions analysed.
Demand isn’t expected to decline however with global oil consumption tipped to rise from the current 98,000 barrels per day rate to an estimated 115,000 barrels per day by 2040.
Other effects detailed by the report include the growth of fleet-owned vehicles as providers take on-board the ownership costs for vehicles used in MaaS programs, a stark contrast to the way services like Uber or Lyft currently operate where drivers provide their own set of wheels (although services like Maven seek to shift this dynamic).
Support industries in the automobile manufacturing supply-chain will also feel the pinch. Demand for plastics used in engine components and liquid-fuel tanks is set to decline, but chemical companies with expertise in battery production will see an increase in demand.
Electricity suppliers are also highlighted in the report, with the growing demand placed on electrical grids providing a boost in an otherwise slowing electricity market in the US and Europe.
The IHS Markit study is a self-proclaimed first of its kind to take a whole-of-market approach to not just the automotive sector, but also the feeder industries that service both suppliers and consumers.