Autonomous Cars to Decrease Vehicle Production, Volvo Says

  • William Hoffman
  • April 11, 2017
  • 0

DALLAS — While mobility-as-a-service and autonomous vehicles are the future, General Motors Co. does not expect a “major impact” on car ownership for at least another 10 years, Harry Lightsey, GM’s executive director of global connected customers and public policy, said during a panel discussion at CBA Live.

However, somewhere down the line, autonomous driving will reduce the overall number of cars on the road, added Lex Kerssemakers, chief executive of Volvo Cars North America.

“It’s very difficult for us to predict what the total projection will be, but yes mathematically there will be fewer cars,” Kerssemakers said at the conference. “We’re building factories as we speak as if nothing will change. I don’t think we have the right answer yet because everyone is building.”

While mobility-as-a-service is poised to grow in urban centers, car ownership will still be the dominant market going forward, GM’s Lightsey said.

His prediction is largely in line with findings at Deloitte Consulting LLP, which predicts autonomous vehicles will not be a “contestable reality” until 2022, Angus Ross, digital transformation and innovation leader for the company, told Mobility Buzz.

Owned cars being used in a shared pool — such as Uber or Zipcar — make up 5% of the market today, Ross said, and the company expects that percentage to rise over the next five years, which might explain why GM and Volvo aren’t shifting production just yet.

Ross predicts that car production is likely to remain flat, but John Murphy, managing director at Bank of America Merrill Lynch, thinks there is a possibility that production will actually increase.

If U.S. production were to transfer to a system that’s nearly 100% autonomous, it would increase the number of miles driven overall because it’s easier to drive, and more people would have access, Murphy said. If the number of miles driven increases to 4 trillion — up from 3.2 trillion in 2016 — manufacturers might sell closer to 20 million cars a year, and there would be more consistency and predictability in the system, he said.

“It’s a very painful transition for the companies and the industries involved, but the reality is you get a more stable, higher volume industry overtime, and that’s just in the U.S.,” Murphy said. “There’s this view that it’s a net negative for the industry, and in reality it might be a very significant net positive — once you get through the pain.”

Those interested in learning more about the evolution of the transportation industry should join us at the second annual Auto Finance Innovation 2017 conference, May 17-18 at the Hilton Bayfront in San Diego. Visit www.autofinanceinnovation.com and to learn more.

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