Ride Sharing Startups As Uber Or Lyft Could Boost Vehicle Sales

Apr 12, 2016 04:10 AM EDT | Victor Thomson


Auto market experts expect that auto sales could actually rise as a result of ride-sharing.

Emerging autonomous technology, ride- and car-sharing services make traditional car ownership less attractive. Massive change is coming for the auto industry. Automakers will compete in the mobility-as-a-service market and an inevitable reduction in individual vehicle sales is expected.

But despite the commonly held notion that these changes might hurt the auto industry, they do not mean that automakers will sell fewer vehicles. Big brands have started to adapt their market strategies.  

Over the last year, Ford has shifted to smart mobility, according to . In recent months, General Motors made sizable investments in its own Maven car-sharing service, as well as in Lyft and Cruise Automation.

According to , analysts at Deutsche Bank AG conclude that these changes will not have a negative effect in the U.S. auto manufacturer and the auto sales will not decline but increase instead. "We believe that the consensus view may be wrong," wrote Deutsche Bank's Rod Lache, who led the team of analysts.

The number of cars on U.S. roads could initially shrink by more than 25 million due to the growth of on-demand mobility via private vehicles. But on demand mobility could be financially and practical attractive in the densest metropolitan areas.

The ride-sharing cars will be much more heavily utilized to transport more people. This will lead to a much shorter vehicle lifespan.

Growing demand for ride sharing will increase physical demands on cars. These vehicles will retire and be replaced earlier. 

The flipside is that a reduction in the number of cars will be compensated by a life cycle of on-demand vehicles of just three years. The higher turnover will lead to a rise in sales.

According to , startups such as Uber and Lyft may boost the vehicle sales in the long run. The auto industry will become less cyclical and annual sales will likely increase.

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