- This is a nice summary of a Frost and Sullivan piece sent on today by its author, Aswin Kumar. It is not going to tell most of you anything that you do notMessage 1 of 1 , Feb 8, 2010View Source
This is a summary of yet another Frost and Sullivan piece sent on today by its author, Aswin Kumar. It is not going to tell most of you anything that you do not know or have already seen abundently here, but I like it as a summary from their point of view of trying to inform/excite eventual suppliers, and his charts 2 and 4 provide neat reminders. Thanks Aswin for sharing.
Frost & Sullivan Market Insight
Published: 5 Feb 2010
Want to save more than just money and also be part of a revolution? – Try Carsharing!
Date Published: 5 Feb 2010
By Aswin Kumar R, Senior Research Analyst, Automotive and Transportation
Ever-increasing population with the growing trend of urbanisation has led to crowded cities, with livability factors such as green space and clean air becoming major causes for concern. This, coupled with vehicles for personal mobility, has given rise to a plethora of issues including concern over ecological sustainability and lack of parking, among other things. Alternative transportation modes, such as public transportation, are irregular and inconvenient, whereas vehicle rental is expensive.
Carsharing, a form of personal transportation solution, which is based on shared vehicle-usage, could address some of the pressing concerns of urbanisation and exponential rise of automobiles. It is a self-service, on-demand, pay-as-you-use, short-term (by the hour or mile) car rental that helps consumers to save on fixed costs in vehicle ownership such as insurance and maintenance, while allowing them to choose from a varied fleet of vehicles. Volatile fuel costs and increasing spend on transportation can be mitigated through carsharing. Approximately 120,000 members joined carsharing across Europe during the recessionary period of 2008 and 2009 alone. Costs and hassles associated with parking are also reduced through carsharing and with vehicles being shared with a large number of members; carsharing also reduces vehicle congestion and emissions through an efficient mix of transportation modes such as walking or cycling.
Carsharing for Sustainable Urban Personal Mobility
Alternative mobility solutions such as carsharing complement other transport modality and give access to people who want the convenience of the vehicle without the hassles of vehicle ownership. Furthermore, carsharing can provide the first and last-mile connectivity for congested urban areas until micro-mobility solutions such as electric-assist bicycles or electric two-wheelers (E2W) gain mass acceptance. Chart 1 shows the development and integration of sustainable mobility solutions such as carsharing and E2Ws.
Integration of Sustainable Mobility Solutions
Governments across the world are expected to adopt federal level policies such as congestion charging or road pricing schemes to curb emissions and to support smart/sustainable mobility solutions such as zero-emission vehicles for transportation. Paris' Autolib' carsharing scheme is the first major instance of a substantial government support for carsharing. The proposed Autolib' scheme plans to put around 3,000 electric vehicles (EV) in and around the city of Paris, with around 1,400 charging points. The scheme also proposes cars-on-demand (no reservation) and one-way trips, services that have long been missing in most traditional carsharing organisations (CSO). Frost & Sullivan estimates that with the introduction of these innovative services and increasing commercialisation, carsharing is expected to garner more than 5.5 million members sharing around 77,000 vehicles in Europe by 2016.
The French green scheme is one of the major proposals for integration of EVs in carsharing. High purchase cost for EVs are not financially justifiable within the carsharing revenue structures and the existing charging infrastructure has hindered the adoption of EVs by CSOs. Active government promotion in infrastructure, monetary support and free-parking for EVs will be crucial and defining factors for EV acceptance and for the creation of true sustainable personal transportation. Frost & Sullivan estimates that from 2012, around 1 in 3 new vehicle additions in carsharing is expected to be a battery operated EV. In addition, 1 in 5 carsharing vehicles is expected to be a battery operated EV by 2016. Chart 2 illustrates the current and planned proposal for EV introduction for carsharing in Europe.
Current and Planned Electric Vehicles in Carsharing (Europe), 2009-2016
Inevitable Transformation of Vehicle Manufacturers as Service Providers
Carsharing is witnessing tremendous competition from a variety of players who can transform this simple mobility service to a true transportation alternative to private vehicle ownership. Vehicle rental companies such as Hertz (Connect), Avis (Okigo) and Sixt (Sixti Car Club) have started their own short-term car rental business to compete with carsharing and they are strengthening their presence across major European cities. Through their large availability of fleet inventory, finance and diversified presence across European Tier-1 cities, these rental companies can give a stiff competition for traditional CSOs.
With an estimated potential of replacing more than 1 million vehicles in Europe due to carsharing by 2016, it is a direct threat to vehicle manufacturers. Automakers are converting this into an opportunity and transforming themselves into service providers by offering integrated mobility solutions. Peugeot's Mu program unveiled during the end of 2009, is one such example where integrated mobility on-demand solutions such as vehicles or micro-mobility solutions are available through Peugeot's dealers or agents. Moreover, consumers can also avail of travel or weekend services through the charging units/points earned through this subscription-based model. Micro-mobility solutions including scooters or cycles, that are rented through the one-stop shop model of Peugeot Mu, complements the modal split (intermodality and multi-modality) of carsharing members. Chart 3 shows the overview of Peugeot's Mu program.
Overview and Business Model (Europe), 2009
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Along with marketing and corporate social responsibility (CSR), carsharing also serves as a very good test-bed for vehicle manufacturers to experiment their strategies. Car2go by Daimler and Peugeot's EV partnership with Greenwheels are some examples where manufacturers use carsharing both as a branding exercise and also to determine consumer perceptions and attitudes towards their vehicles. Chart 4 shows a representative illustration of major vehicle manufacturers currently offering carsharing services across the globe.
Major Vehicle Manufacturers in the Carsharing Market (World), 2009
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The Verdict – National framework needed to bring carsharing into mainstream transportation solutions!
Carsharing has an estimated revenue potential of more than €2.6 billion by 2016 and the potential to replace more than 1 million vehicles by 2016 in Europe. This will eventually lead to a number of stakeholders in the carsharing ecosystem. With the integration of EVs and carpooling services into the market, the market is expected to transform as a key sustainable mobility solution for European consumers. Countries such as France and the United Kingdom are expected to be the high growth markets owing to the good use of mobility management solutions and better federal support in mainstreaming carsharing services. New services, new target groups, integration with other operators and solutions, innovative marketing strategies using Web2.0 and geographic diversity are likely to provide major competitive edge and are necessary to ensure that carsharing does not remain only as an urban niche phenomenon.
This article is a part of Frost & Sullivan's current research study titled "Sustainable and Innovative Personal Transport Solutions - Strategic Analysis of Carsharing Market in Europe". To know more about the research or obtain the table of contents of this study, please contact the author at aswin.kumar@... or Monika Kwiecinska, Corporate Communications, at monika.kwiecinska@...
Note to readers: Carsharing is also called car clubs in the United Kingdom and is different from car pooling or ride sharing services.