New ownership models transform finished vehicle logistics
Finished Vehicle Logistics will transform as people move away from privately owning a car to utilising car pools. Henrik Zander, our Head of Logistics Services, takes a closer look at the trend with car sharing and autonomous vehicles.
By 2025, it is estimated that more than half of all current car owners will no longer want to own a car. The traditional car/ownership model is likely to shift towards transportation services where customers increasingly pay per transportation, serviced by autonomous vehicles that circulate the city. This will ultimately change the logistics around finished vehicles.
The vehicle that delivers itself to final point
In a long-term scenario, where car-sharing fleets and possibly autonomous vehicles dominate, we are likely to end up with no specified delivery points for automotive logistics suppliers. Instead, the vehicles themselves will perform the last mile delivery by joining a fleet of autonomous cars circulating the cities.
In recent years, we have witnessed how the car manufacturers are acting on the trend, to position themselves for the potential change; GM is investing in Lyft and Sidecar, BMW in Scoop and VW in Gett. Financial Times recently reported that the consultancy firm Ernest and Young calculated that already now, nearly USD 19Bn of deals between carmakers, tech companies and mobility sharing platforms took place in 2016.
Growing need for After Sales Services
New service segments are also likely to emerge within automotive logistics, related to car sharing and autonomous fleets. In most cases, driverless vehicles in such fleets will have to be on the road almost around the clock to offset the cost of the sensors, computer chips, software and other systems. Consequently, more proactive, preventative maintenance has to be done, than what a normal person would do on a car. On top of this, vehicles will need to be washed, cleaned and inspected on a frequent basis.
As an example, Google’s company within self-driving technology, Waymo, recently awarded AutoNation to maintain and repair the growing number of driverless vehicles that they are testing around the US.
In summary, the Finished Vehicle Logistics industry needs to prepare itself for the new reality as vehicle control (driver vs. autonomous) and ownership (personal vs. shared) models change. For the agile player, there are opportunities to catch in the emerging landscape.