Self-Driving Cars Could Cut Vehicle Sales By 40 Percent

A new report by Barclays indicates that vehicle ownership could shrink by 40 percent in the next 25 years. The cause behind this possible reduction of vehicle ownership is shared self-driving cars. Autonomous vehicles will potentially be used more efficiently and thus limit a perceived need for more cars in a family driveway. According to this report by Barclays Plc analyst Brian Johnson, a self-driving family car will simply transport all family members as needed.

This report certainly paints vehicle usage as being utilitarian transit verses the American value of owning a car and hitting the open road. The report estimated when most cars are autonomous, vehicle sales will drop 40 percent of their current rate to 9.5 million units per year and that cars on the road in the U.S. would drop by 60 percent. To justify part of this eye-opening report, Johnson is looking at the past to the days of horse-drawn carriages. Johnson noted, “Horses once filled the many roles that cars fill today, but as the automobile came along, the population of horses dropped sharply.” Is it possible that the modern automobile consumers love to drive will go the way of the horse and buggy?

Johnson also indicated in his report that two domestic automakers would need to change in order to survive in the future. Johnson explained that larger automakers “would need to shrink dramatically to survive. GM and Ford would need to reduce North American production by up to 68 percent and 58 percent, respectively.”

That decrease in production would also potentially be at a time when self-driving autos would be making a splash on the auto industry. The report projects the self-driving car market would become a $42 billion dollars business by 2025, with autonomous cars representing 25 percent of global auto sales by 2035. In his report, Johnson explained that 4 vehicles in the future would be broken down into 4 categories:

1. Traditional automobiles
2. Family Autonomous vehicles
3. Shared Autonomous Vehicles (SAVs)
4. Pooled Shared Autonomous Vehicles (PSAVs)

According to a Benzinga report, “In the future, each SAV could displace nine traditional vehicles, with PSAVs offering 2x the impact and fractional prices (i.e., as low as $0.08 per mile, versus the $3.00 to $3.50 cost per mile of an UberX).”

What do you make of this report? Will self-driving cars change the entire world? Will automotive and thus retail automotive have to shrink due to the changing nature of the modern vehicle? Finally, do you truly believe consumers will want to give up driving and just sit back while their computer navigates them all over the map?