Fewer Vehicles, More Sales in Autonomous Age
Anticipate fewer vehicles will ply the roadways when the age of autonomous vehicles is in full swing a few decades from now.
But that thinning out of traffic won't mean auto sales will fall. In fact, they will increase, predicts Mark Barrott, Plante Moran's director-mobility intelligence center.
That's because vehicles that are in operation in the future will get much more use, especially as Mobility as a Service takes off in the impending autonomous-vehicle age, he says.
"Some say that autonomous vehicles will (practically) be the death of vehicle production," Barrott (pictured below) says. "We see the opposite" because more miles driven means shorter vehicle lifecycles and subsequently higher industry revenues.
Unlike today, few vehicles are expected to spend much idle time sitting in driveways when MaaS and AVs take hold in coming years.
"If you use a vehicle more, you need to replace it more often," Barrott says during the Society of Automotive Analysts' online 35th Annual Automotive Outlook Conference.
"So, you will see higher sales, but fewer vehicles," says Barrott. "It's counterintuitive."
As part of MaaS, consumers would buy miles, not vehicles, Barrott says. "We absolutely see the direction toward fleet ownership. the OEMs, Lyfts and Waymos of the world will own these vehicles. It will be a game changer."
He forecasts explosive MaaS spending growth: from $27 billion in 2017 to $176 billion in 2027 to $3.4 trillion in 2050.
Using terms such as "vehicle utilization" and "asset longevity," he describes "new types of ownership and financing" that challenge traditional thinking.
- Vehicles in operation will shift from nearly 275 million to about 125 million.
- Annual vehicle sales will increase from about 15 million a year to 23 million.
- Miles annually traveled in the U.S. will jump from 30 trillion to 65 trillion.
Vehicle-related spending - from purchases to repairs to insurance - will change minimally from $2.4 trillion in 2017 to $2.5 trillion in 2027, Barrott says. But he anticipates a big jump thereafter - to $5.7 trillion in 2050.
Surveys indicate many skeptical consumers are uncomfortable with the prospect of riding in a self-driving vehicle. And if some early predictions had been right, fully autonomous vehicles would be mainstream today. (What we don't know, we don't know.)
Yet, despite today's current consumer trepidations and yesterday's mistaken forecasts, Barrott says, "Autonomous-vehicle technology has legs."