Shared mobility, the collective use of vehicles by commuters, has been a growing trend for a while now globally. Shared mobility encompasses vehicles of many kinds including cars, vans, electric bicycles, scooters, and motorcycles. Not only is it cost-effective for consumers, but it offers transportation accessibility without requiring vehicle ownership. For these reasons — especially alongside remote work trends caused by the pandemic — it’s no wonder that shared mobility is expected to continue to grow. What does this mean for the automotive industry? Keep reading for its expected future impact as predicted by the research and analysis firm FutureBridge.

According to FutureBridge, on average globally, commuters who own a private vehicle don’t use their vehicle at all for about 2 months out of the year. They also report that outside the U.S, “most of the key economies across the globe prefer shared mobility over owning a vehicle.”

Vehicle Sales Are Expected to Slow

As reported by FutureBridge, CAGR (compound annual growth rate) was at 3 to 4 percent during 2015 to 2020 and this is expected to decrease to 1.1 percent by 2030. They state one of the main reasons for this reduction in the rate of growth will be that more consumers will prefer to share a vehicle rather than own one.

Shared Mobility Market Demand Will Grow Significantly

Meanwhile, according to FutureBridge, experts expect significant growth of the shared mobility market over the next 5 to 7 years at a rate of 16 percent CAGR from 2018, hitting $180 billion in 2025. The rate of growth may be even higher, as much as over 20 percent CAGR, due to the increasing popularity of self-driving taxis, which may further reduce consumer need for vehicle ownership.

The Rise in Shared Mobility Will Be Centered in Asia

Due to concerns about traffic congestion and the environment, experts are predicting that Asia, especially China and India, will see the most growth in the shared mobility market. FutureBridge reports, “China is a leader in ride-hailing services and some of the leading players like Uber and DiDi already have gained a strong foothold in the country through joint ventures, collaborations, and M&As.”

Automakers Will Evolve Their Business Models

In response to the growing shared mobility market, new business models are expected to develop. For example, experts expect to see collaborations and partnerships between OEMs and shared mobility service providers.

FutureBridge predicts the growth of three business models:

1. Purpose-built vehicles for mobility on demand
2. Vehicle-as-a service
3. Contract manufacturing

Purpose-built vehicles are expected to be 25 percent less than the cost of conventional vehicles, and the market for them is expected to hit up to 2.5 million by 2025 at a 20 percent CAGR during the period of 2020 to 2025.

Also, many OEMs have already entered collaborations with mobility service providers such as Ford and Volkswagen, who in 2019 announced their partnership with Argo AI, an AV (autonomous vehicle) technology platform provider.

Another model, known as vehicle-as-a service, is expected to grow. This is where OEMs provide services such as insurance, financing, repairs, and maintenance for the mobility service provider to be billed on a weekly or monthly subscription basis.

Finally, contract manufacturing, whereby mobility service providers will partner with automakers on a contract basis to create custom vehicles for ride-sharing and ride-hailing, is also expected to increase. This could result in mobility service providers having their own branded fleet of vehicles designed to their specifications.

While it may be several years before we see shared mobility trends make a visible impact on the automotive industry, it’s time for OEMs to start developing and implementing new strategies. By collaborating with mobility service providers and developing new business models, they can be expected to maintain or even gain market share in the coming years