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Sharing Hurts Sales

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On: Thu, Feb 6, 2014 at 2:46PM | By: Karen Cook

Sharing Hurts Sales

If you live in a congested city with huge skyscrapers and tiny apartments built one atop the other, you may not have the available space to store a vehicle. Taxis have been the norm in these situations for decades. Now, though, it is easy to grab a car off the street and drive to almost any destination in comfort without having to depend on a taxi whose driver may or may not know where you need to go. (We’re talking car sharing here, not theft.) It’s definitely a convenience, but a new study by Alix Partners has the auto industry worried.

Alix recently conducted a survey of 2,000 adults in 10 major cities across the United States which all have a sizeable network of car sharing availability. The study found that almost half of regular users end up not buying a car and that has led to 500,000 lost sales for auto makers since 2006 when the service first became widely available.

There have been other studies done in the past, but Alix Partners says those findings underestimated the impact car sharing has had on car sales. The new data shows that there are 32 sales lost for every vehicle added to a car sharing fleet like Zipcar, RelayRides, or Cars2Go. By the end of the decade this could mean 1.2 million cars that were not sold at dealerships.

The study also warns against treating the surge of car sharing as a passing craze. There are far fewer complications with sharing a vehicle rather than owning it. There are no storage issues, no repair bills, and when the fleets begin offering automated vehicles it could spell big trouble for both the auto industry and taxi services.

In an effort to head off these potential losses in revenue some manufacturers, like GM and Daimler, have either started their own sharing programs or partnered with programs already functioning.

I wonder though if all these statistics take into account the millions of people who live in crowded cities with no garages or carports who wouldn’t have purchased a vehicle anyway.


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