The New York Times' Neal Boudette wrote on Tuesday about how the big carmakers are adjusting to the threat of ride hail making individual car ownership obsolete.
Among the interesting bits were examples of Los Angeles-area people going mostly carless (from my view the last and final test among U.S. cities), that automakers are now considering the first and last mile (to the bus or train station and back) that mostly occupies public transit analysts, and that a shift away from individual car ownership could be a financial relief for automakers, who expend massive capital to produce new cars. Boudette breaks out that math:
Automakers are generally betting that sales of vehicles to fleet services will offset any decline in sales to individual consumers. Boston Consulting Group predicts that 44,000 cars will be sold to ride-sharing fleets in North America in 2021, more than making up for an expected net decline in consumer sales of about 8,000 vehicles.
The bigger impact might be on how the automotive industry — not just carmakers, but also fleet service operators, parts makers and the like — makes its money in years to come.
According to the consulting firm PwC, the global automotive industry generates about $400 billion a year in profits; about 41 percent of that — or about $164 billion — comes from new vehicle sales.
By 2030, PwC forecasts that even as overall automotive profits grow to about $600 billion, only about 29 percent of that will come from new vehicle sales. By then, PwC predicts that “mobility services’’ — including ride-hailing and other types of last-mile transportation services — will represent 20 percent of the automotive industry’s profits.
Ford is among the automakers angling to be in position if that shift occurs.
“We are on the cusp of a revolution,” Mark Fields, Ford’s chief executive, said at the Los Angeles Auto Show in November. Cars, he said, “are no longer our entire game.”