In the automotive industry, several changes and disruptions are estimated, according to Kumar Saha, Frost & Sullivan Director of Mobility for market researchers, addressing an audience at the Automotive Aftermarket Products Expo (AAPEX) in late 2018.
Saha has said that the current impacting and enabling connectivity trend will be the driving force on how cars and fleets operate in the future, as autonomous vehicles and car sharing aren’t possible without some form of connectivity. He has predicted that about 120 million vehicle units will be sold globally every year by 2040, while about 40% of vehicles will be operating in a fleet environment, in line with the growth of online retailing, especially in Asia – future fleet vehicles are going to be more connected, more automated, more shared and more electrified, ultimately generating multitudes of data, which can be turnkey investments to a company.
Frost forecasts that there will be about 170 million new connected vehicles within the next decade in North America alone, and even older vehicles can be upgraded with aftermarket connectivity solutions to keep vehicle uptime, reduce cost of ownership and also serve the industries as best as possible.
Frost & Sullivan predicts consolidation among ride-sharing and vehicle-sharing operations; greater OEM experimentation in shared mobility modes; and growth in vehicle subscription programs; the four current paradigms include:
- E-hailing or ride-sharing (such as taxi, Uber, and Lyft operations)
E-hailing automates ride-hailing operations by a phone app while ride-sharing is an extension of the e-hailing service with carpooling, to lower the transportation cost.In overall vehicle space, these services have rapidly increased vehicle miles traveled in urban areas, by some 200% in the last three years.
E-hailing/ride-sharing vehicles evolve the definition of the fleet – usually an entity owns a number of the vehicles – as they operate on a single platform to reach customers, and not necessarily in fleets.
Car/bike/scooter sharing enables individuals to use a transport vehicle on a short-term basis for a fee. Since the boost in vehicle miles traveled will increase the maintenance cycles on these vehicles, Saha estimates that each shared vehicle would replace some 18-20 vehicles from the car parc – about 2-3 million vehicles by 2030.
- Vehicle subscription
Vehicle-subscriptions are all-inclusive programs offered by auto makers that cover maintenance, roadside assistance and insurance for a monthly fee; some programs allow customers to exchange vehicles during the year.
Several car makers, including American divisions BMW, Mercedes-Benz, and Audi are testing this service in limited markets, while Ford Motor is testing a used-car subscription service. These vehicles will be maintained as if they are fleet vehicles.
Used subscription vehicles would be serviced by the OEM dealership and later removed from service in the aftermarket. Frost & Sullivan believes the subscription service will become a common purchasing option by 2025, involving an estimated 70 million vehicles in North America, especially popular among millennials.
Telematics is becoming critical for optimising cost of ownership, providing direct access to better operation of fleet vehicles, thus adding to and augmenting the embedded connectivity in some of these fleets.
A huge amount of growth in connected fleets and fleet-optimisation apps is expected, including those used in maintenance and other services, such as tracking/parking, installer information and parts supply.
Vehicles with adaptive driver assistance systems (ADAS) are supposed have reduced collisions by 25-40% and will see the biggest growth by 2030, with nearly 80% of US vehicles having some level of ADAS technology.
Collisions and collision claims will start to noticeably reduce after 2025, however, this may not equate to a reduction in dollars as many of these vehicles are going to be at least 20-30% more expensive to repair and have high embedded sensor costs – this is not directly transferred to revenue loss.
Tyre suppliers will then be offering conventional tyre services, such as balancing, life cycle management, TPMS service and mobile installation, as well as connected services for regular maintenance, parts replacements and service reminders.
Saha has noted that tyre suppliers are proactive: “Michelin, Goodyear, and Bridgestone have (introduced) or are introducing some level of fleet solutions that would create connective maintenance services – these suppliers are able to control or have more visibility to the fleets and gain more of their business.