- Self-driving technology and mobility as a service to reduce desire for car ownership, say automotive executives
- Diesel technology on its way out, with 93% of carmakers planning to invest in electric vehicles
More than half of today's car owners will not want to own a vehicle in less than a decade, as car ownership takes a back seat to self-driving technology and mobility as a service, according to UK automotive executives questioned for a new survey.
The poll, KPMG's Global Automotive Executive Survey 2017, found that almost three-quarters of respondents (74%) think that today's car owners will not want to own a car in less than a decade.
“The UK is particularly suited to the early adoption of self-driving cars consumed as a service,” said John Leech, UK Head of Automotive at KPMG.
“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.”
Connected cars to see manufacturers sell digital services
Despite this predicted shift from car ownership to car use, the majority of automotive executives are not worried by the prospect of fewer cars and therefore lower revenues.
Instead, 85% of those questioned believe that their companies will shift from just selling cars to providing new digital services, increasing revenues in the process.
“Carmakers plan to sell a myriad of new digital services to vehicle users,” said Leech.
“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.”
As a result, said Leech, carmakers will no longer be evaluated just on the quantity of vehicles sold, but on customer value over the whole lifecycle.
“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,” said Leech.
Battery electric vehicles poised to replace diesel
Nearly two-thirds (62%) of the executives questioned also see diesel technology as a thing of the past, found the report, and expect diesel-powered vehicles to eventually vanish from manufacturers' portfolios.
To replace them, an overwhelming majority (93%) of UK automotive executives plan to invest in the technology for battery electric vehicles over the next five years.
Indeed, this year's survey saw battery electric vehicle technology overtake connectivity and digitalisation as the key trend, with nine in ten executives polled expecting battery electric vehicles to dominate the marketplace by 2025.
“Improvements in the cost and range of battery technology, coupled with growing concern over the emission of both carbon dioxide and nitrogen oxides from diesel engines, means that almost the whole automotive industry believes that the mass adoption of electric cars will happen during the next decade,” said Leech.