Whether people think the auto industry is going to benefit or be hindered by the creation of autonomous vehicles, there’s no doubt that they will change its long standing landscape one way or another. Barclays believes that change will be quite drastic too, with as much as 40 per cent of new car buys killed off with the introduction of driverless cars, due to a change in the way people get about and in the way people own vehicles.
Much in the same way people share taxis today, they will likely share driverless cars in the future claims Barclay’s analyst, Brian Johnson (via WSJ). However this isn’t just out of a measure of convenience, it’s that the first driverless cars will likely be quite expensive. As it stands, Google’s pod cars cost upwards of $250,000 each and modified automated vehicles cost at least $10,000 more than the standard list price, so early adopters will likely be multiple families, communities and organisations.
Due to the larger groups of people buying or loaning the vehicles, people will only use them when needed, meaning they aren’t sitting on drive ways or in car parks for 90 per cent of their lives like current cars, but will be constantly in use. Taxi firms and other transport companies will utilise them too, making it far cheaper to simply grab a taxi than it is to buy one of these new vehicles.
Though the price will come down in time, it won’t come in time to save the mainstream car manufacturers Johnson believes.
“Mass market OEMs would need to shrink dramatically,” he said, suggesting that companies like Ford, and General Motors would see drops in their sales by as much as 68 per cent in some areas.
This reduction in cars may reduce congestion and road wear, but it will also have a huge impact on long standing industries, killing off thousands of job in auto-manufacturing, repair and maintenance, as well as sales.
Human-driven vehicles will likely still dominate in rural areas for many decades to come, but gradually society will shift to automated vehicles and that will change the way we buy and own them too. While the rich may maintain a manual car for a fun drive on the weekend, day to day driving may happen more and more in publicly owned vehicles and private taxis, all without a driver and therefore without the need for individual owners.
Do you think Johnson’s prediction of the future is likely to come true?
Image source: Mercedes