According to a new survey by global financial services partnership KPMG, UK automotive executives expect that more than half of today’s car owners will not want to own a car in less than a decade.
KPMG’s Global Automotive Executive Survey 2017 found that 74% cent of UK automotive executives think that until 2025, more than half of car owners today will not want to own a vehicle, as self-driving technology and Mobility-as-a-Service (MaaS) will take priority. The company’s 18th consecutive annual report revealed that 62% of UK automotive executives view diesel technology as a thing of the past, expecting the traditional powertrain technology to eventually vanish from the manufacturers’ portfolio. Meanwhile, 93% of UK automotive executives are planning to invest in the technology for battery electric vehicles (BEVs) over the next five years.
For the first time, BEV technology has overtaken connectivity and digitization as the key trend in this year’s survey. The report revealed that 90% of UK automotive executives expect battery electric vehicles to dominate the automotive marketplace by 2025.
The study also shows that with consumers shifting to using cars but not owning them, it is likely there will be fewer cars and therefore less money to be made from building vehicles in the future.
This does not worry the majority of automotive executives: 85% of the respondents said they are convinced that their company will generate higher revenues by providing new digital services, than selling cars alone.
“The UK is particularly suited to the early adoption of self-driving cars consumed as a service,” commented 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 revolutionize UK urban transportation in the second half of the next decade.”
Leech continued, “Car makers plan to sell a myriad of new digital services to vehicle users. Today, car makers 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.
“For the auto industry this implies that pure product profitability is outdated. Car makers’ success will not be evaluated solely on the quantity of vehicles sold, but on the customer value over the whole lifecycle; especially when the digital ecosystem will be ready for the market.”
“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,” Leech concluded.