More than half of today’s car owners will not want to own a car in less than a decade, according to respondents in KPMG’s Global Automotive Executive Survey 2017.
When asked, 74% of the UK automotive executives said that by 2025, more than half of car owners today will not want to own a vehicle, as self-driving technology and mobility as a service will take priority.
John Leech, UK head of automotive at KPMG, said: “The UK is particularly suited to the early adoption of self-driving cars consumed as a service. Our greenbelt policy has created a relatively dense urban population which, when coupled with our high fuel prices, means that so-called “robot taxis” offer a greater cost saving to the UK public, compared to European or North American markets. I believe robot taxis will revolutionise UK urban transportation in the second half of the next decade.”
With consumers shifting from owning vehicles to using them, KPMG said it is likely there will be fewer cars and therefore less money to be made for building vehicles in the future.
The firm said this did not seem to worry the majority of automotive executives, with 85% of respondents saying they were convinced their company would generate higher revenues by providing new digital services than selling cars alone.
Leech said: “Carmakers plan to sell a myriad of new digital services to vehicle users. Today carmakers already make substantial profits from the sale of consumer finance and annual vehicle insurance but this will grow in the future as innovative services such as remote vehicle monitoring and the integration of the car as a focal point in people’s ever more connected lifestyles are demanded by consumers.
“For the auto industry this implies that pure product profitability is outdated. Carmakers’ success will not be evaluated solely on the quantity of vehicles sold, but on the customer value over the whole lifecycle – especially when the digital ecosystem will be ready for the market.
“So OEMs need to rethink. More than three out of four executives believe that one connected car can generate higher revenues over the entire lifecycle than 10 non-connected cars.”
Unsurprisingly, the majority of executives (60.1%) asked said connectivity and digitalisation would be an extremely important trend – more than any other option KPMG gave. When looking solely at manufacturer executives, however, this slipped to fourth, behind market growth in emerging markets, hybrid electric vehicles and fuel cell electric vehicles.
KPMG said this reflected the fact that most OEMs are still focusing on challenges caused by their traditional business.