Autonomous vehicles could take at least another eight years before they hit the Australian market, but their impact will be much greater than people predict, according to carsales’ head of product and insights Sam Granleese.
The largest impact will be the substitution of full car ownership for car sharing schemes, as well as the collapse of professional driving, such as commercial transportation, taxis and ride-sharing, which Granleese believes will begin to significantly impact the domestic market from 2030, once stage five fully autonomous cars become mainstream.
“I believe Uber with self-driving cars looks more like Airbnb (where the car fleet is owned by private owners who share surplus time) than Marriot Hotels (where the network also owns the supply),” Granleese adds. “The cost benefits of that are obvious. If 75% of Uber's fee is driver related and they can cut that out, the price can come down and profits can go up”.
“Inevitably the marketing effort will be split between the branding and retail campaigns that are designed to get customers buying, and co-operative branding and promotions to support aggregator services & car subscriptions”.
“It isn’t hard to imagine: 'Uber AMG, powered by Mercedes-Benz ' or 'Upgrade to carsales Unlimited this month and get 10 bonus drive-time hours across the BMW M-Sport range'.”
A couple of manufacturers have already invested in ride sharing companies such as Fords’ investment in Lyft and General Motors’ investment in ride-sharing platforms.
Not all car manufacturers will go down this path, but Granleese expects fully autonomous vehicles to be positioned as premium products within a broader range until the technology becomes mainstream. This could happen by 2040 when around 80% to 90% of cars on the road are autonomous - and it’s even conceivable that it will become illegal for humans to drive vehicles on public roads.
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“There are big expected gains in autonomy from a safety point of view, whether it’s fewer crashes, or more expensive insurance on a car that you choose to drive yourself” he adds.
“Autonomy could have an impact on the motor insurance industry and its future.”
Granleese expects there to be a natural gravitation towards autonomous vehicles once trust in the technology has been established, but the really advanced features of autonomous vehicles could take many years to become mainstream.
“We can't see car ownership and people wanting to choose their car brands going away over the next 20 or 30 years at that personal level, but at the fleet commercial level it will be a much quicker transition,” Granleese predicts.
One interesting model that could help consumers get a taste for premium autonomous vehicles sooner is the growth of subscription car ownership models.
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“I think what’s happening now with car subscriptions will speed up autonomous technology take up by consumers,” Granleese says. In the USA, Porsche recently launched a subscription model where consumers pay a monthly fee and receive access to around 20 different models in return. Cadillac have also launched a similar model.
“You have your primary vehicle, but can swap it over to different models dependent on what’s available,” Granleese explains.
It's unclear how well this form of car ownership will take off in Australia, but as major cities like Sydney and Melbourne continue to become more congested, full time car ownership becomes a less attractive proposition.
What is clear is that the advancement of autonomous technology and flexible ownership models will radically shake up the automotive industry in the years ahead.
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