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Market Insight: Car-share users to reach 12m by 2020
Car-sharing in top gear globally but long-term growth, profits ‘not a given’: study
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23 Sep 2013
By TERRY MARTIN
CAR-SHARING services have taken off in Australia and abroad, and the industry is expected to reach 12 million members worldwide by 2020 – up from 2.3 million this year – according to a new study by international market research and consulting firm Navigant Research.
The recently released ‘Carsharing Programs’ report says that car-share services have enjoyed rapid growth since the 1990s, moving from an informal network of small companies and organisations to a market driven by major multinational corporations, particularly over the past five years.
Navigant predicts that global car-sharing services revenue will approach $US1 billion in 2013, and grow to $6.2 billion by the end of the decade.
The big growth areas are in North America, Europe and the Asia-Pacific region, with car-sharing pitched as a potential solution to ‘global gridlock’ in the world’s major cities, a greener way to drive and a means of tackling the rising cost of personal vehicle ownership.
“Car-sharing offers members the ability to enjoy mobility without the expense and hassle of owning a car, or the need to frequently rent a vehicle from a traditional car rental agency,” said Navigant’s senior research analyst Lisa Jerram.
“In addition, car-sharing is viewed by both public and private entities as a powerful tool to reduce urban congestion and lower emissions of greenhouse gases.” Australia’s largest car-sharing company, GoGet, has more than 20,000 members and a fleet of around 800 vehicles, most of which are mainstream small and light-sized cars but also include electric vehicles, prestige models and light commercials.
In comparison, ZipCar, which is billed as the world’s biggest car-sharing network and currently operates in the US, Canada, the UK, Austria and Spain, has more than 810,000 members (up from 50,000 six years ago) and more than 10,000 vehicles in its fleet.
In a sign of the times, global rental car giant Avis Budget Group purchased ZipCar earlier this year for about $US500 million, saying it was unable to ignore the fact that car-sharing had grown to be a $US400m-a-year business in the US alone and was expanding rapidly in major cities around the world.
Navigant Research says the advent of mobile phone apps and vehicle connectivity is driving growth in car-sharing services, and that business models have proliferated to now include “university car-sharing fleets, automotive OEM-run services, peer-to-peer car-sharing and one-way car-sharing”.
However, a variety of problems facing the industry in this period of “consolidation and buy-out” are also identified.
“Continued growth is not a given,” Navigant says. “The car-sharing business is struggling to reach profitability even as membership increases.” The report says the market is constrained by the ability of car-sharing companies to achieve sufficient revenue per vehicle “in order to create a sustainable, profitable business”.
It adds that future growth will continue to be limited by the perceived inconvenience of not privately owning a vehicle, and that consumer attitudes about cars as “symbols of status, success, privacy and freedom” persist.
According to Navigant, city dwellers face rising levels of congestion as the number of vehicles surges from 1 billion in 2011 to 2 billion by the end of the decade and to 3 billion-plus over the course of this century – startling statistics that put the onus on policy-makers, urban planners, car companies and entrepreneurs to find solutions to ease traffic congestion and the associated issues.
In Australia, federal government census figures released earlier this year show that there are almost 17.2 million motor vehicles registered for road use here, marking a 12.3 per cent increase since 2008 and an average annual growth rate of 2.4 per cent over this period.
GoGet says that studies from around the world have shown that for every car-share vehicle, between seven and 20 private cars can be taken off the road, and that in Australia its member surveys indicate that a single car-share car can eliminate the need for nine private vehicles.
Last year, GoGet forged a deal in Queensland to integrate its car-sharing service into Brisbane’s public transport network – believed to be the first system of its kind outside Europe – and is hoping to sync with public transport systems in cities across Australia.
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