Arab Today, arab today car giants see road to riches in sharing
Last Updated : GMT 07:55:03
Arab Today, arab today
Arab Today, arab today

To invest in car and ride-sharing services

Car giants see road to riches in sharing

Arab Today, arab today

Arab Today, arab today Car giants see road to riches in sharing

A typical car spends 95 percent of its life at a standstill
Paris - Arab Today

Auto giants are racing to invest in car- and ride-sharing services, lured by the prospect of fat profits yet to be tapped from a billion cars on the world's roads.

A typical car spends 95 percent of its life at a standstill, industry analysts say, making it a vastly under-utilised, depreciating asset. There may be big money waiting, therefore, for the business that can get the car moving again.

That is incentive enough for manufacturers from Toyota to Volkswagen and General Motors to join an investment rush, apparently without fear of ushering in a future in which individual car ownership is no longer king.

Thinking of the car business as a service dramatically changes perceptions of its value, Morgan Stanley analyst Laura Lembke told a conference in Munich this past week.

New car sales worldwide run at about 80 million a year bringing in $1.5 trillion (1.3 trillion euros), Lembke said.

But the total existing stock of cars is closer to one billion vehicles. If the average cost of a trip is $1 a mile (0.56 euros per kilometre), she estimated the market value could be as much as $10 trillion.

That estimate helps to explain the valuations placed on apps such as ride-hailing service Uber, valued at $62.5 billion -- a third more than the world's number three auto manufacturer General Motors.

- Large investments -
GM this year invested $500 million in Lyft, one of the chief competitors to Uber in the United States. Last month, Toyota announced a strategic partnership with Uber, with an undisclosed investment. Volkswagen ploughed $300 million euros into taxi app Gett on the same day.

"Alongside our pioneering role in the automotive business, we aim to become a world leading mobility provider by 2025," said Volkswagen chief executive Matthias Mueller.

Automakers see an opportunity but it is too early to accurately assess the potential value of such a young industry, said Jeremy Carlson, senior analyst of automotive technology at research group IHS.

Car manufacturers may sell into a fleet of vehicles for drivers to use in these new services, he said. Or they may decide to gain experience and launch competing services.

"Yes, this has the potential and the likelihood to impact the traditional automotive business model at least in some capacity," Carlson conceded. 

"But we don't expect the kind of traditional ownership and sales model to disappear anytime soon. We expect it to be the majority until at least 2035 and for all of those years vehicle sales, the traditional model, remains the vast majority of our automotive sales."

- Self-driving cars -
Even if the future brings us self-driving vehicles combined with car-hailing apps to offer a service rivalling the convenience of private ownership, the market for car manufacturers could survive, the analyst said.

"When you have autonomous added to car sharing and ride sharing, those vehicles are running at a higher rate and are making many more trips. The idea is that you will replace those vehicles much faster," Carlson explained.

"There may be an impact on the total vehicle production and sales base, but it's certainly not nearly as drastic as we have seen in other reports."

Paulin Dementhon, founder of Drivy, a French app that lets car owners rent out their vehicles, said the new services were starting to live up to their promise.

Manufacturers, now concerned primarily with building and selling vehicles, would have to decide how to adapt to a market of car-related services, he said.

"Sales might suffer a bit but the car is also a consumable," Dementhon said. "There will be fewer people buying cars but after two years they will have done 200,000 kilometres," he said. Then they will need replacing.

Source: AFP

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today car giants see road to riches in sharing Arab Today, arab today car giants see road to riches in sharing

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today car giants see road to riches in sharing Arab Today, arab today car giants see road to riches in sharing

 



Arab Today, arab today
Arab Today, arab today Designer Aql Faqih aspires to innovation

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation
Arab Today, arab today Italy regions back 'big bang' autonomy

GMT 07:10 2017 Monday ,23 October

Italy regions back 'big bang' autonomy
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Syrian children die of hunger

GMT 19:25 2017 Sunday ,22 October

Syrian children die of hunger
Arab Today, arab today Maltese demand justice for murdered

GMT 06:08 2017 Monday ,23 October

Maltese demand justice for murdered
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today World's deepest lake in peril

GMT 15:54 2017 Friday ,20 October

World's deepest lake in peril
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Delhi braces for pollution 'airpocalypse'

GMT 16:07 2017 Friday ,20 October

Delhi braces for pollution 'airpocalypse'
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Tesla to build wholly-owned plant

GMT 07:55 2017 Monday ,23 October

Tesla to build wholly-owned plant
Arab Today, arab today EU raids automaker BMW

GMT 11:06 2017 Saturday ,21 October

EU raids automaker BMW
Arab Today, arab today Actress Mona Zaki praises husband’s role

GMT 08:15 2017 Thursday ,19 October

Actress Mona Zaki praises husband’s role
Arab Today, arab today Massacre fears spark race

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race

GMT 08:57 2017 Wednesday ,18 October

Actress Shery Adel happy for Egypt’s qualification

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 06:07 2017 Sunday ,22 October

15,000 Under Fives Die

GMT 12:54 2017 Saturday ,21 October

Malaysia Airlines picks new CEO

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 20:46 2017 Thursday ,19 October

Qualcomm files lawsuits in China to ban iPhones

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday