The Shift from
Ownership to Usage:
Future Implications
Motor Finance Europe, Frankfurt
7th April 2016
2
MOBILITY MOBILITY
Frost & Sullivan: Thought Leading In A Fast Changing Landscape
Sharing Economy
Vehicle
Financing
Connected Cars
Source: Frost & Sullivan
3
Virtualization
Congestion
Transport =
Door-to-door Mobility
• New Vehicles: BRT, EV,
High Speed Rail
• New Business Models:
Vehicle Sharing, Car Pooling
• Inter- Connectivity: Inter-
modality
• Urban Planning:
Reallocation of street space
• Integrated Mobility: New
technology enabled multi
modal integration
Paradigm Shift from Vehicle Ownership to Vehicle Usage Public and private transport are converging; Integrated Multi Modal Mobility Networks being created
Transport =
Private Vehicle
• Freedom
• Convenience
• Status
• Progress
• No Real Alternative
Gen Y
Connectivity
Population
Growth
Urbanization
Social
Responsibility
Natural
Resources
Pollution
Globalization
Mobility Integration: Paradigm Shift from
Vehicle Ownership to Vehicle Usage
Source: Frost & Sullivan
4
Vehicle Financing: An Evolving Industry Threatened by Revolution As Usage takes hold the competitive landscape is shifting as people seek ‘better’ mobility
OPTIONAL
ESSENTIAL
CONFORMATIONAL
ASPIRATIONAL
I CAN
AFFORD IT
HELP ME
AFFORD IT
WHAT VEHICLE
DO I NEED?
MAKING SURE
AFFORDABLE
Source: Frost & Sullivan
5
Carsharing
• Round Trip
• One-Way (A-B, A-X)
• Peer to Peer (P2P)
• Corporate
Ridesharing
• Fixed Carpooling
• Dynamic / On-Demand
• Corporate
Bikesharing
• Bicycles
• E-Bikes
• Peer to Peer
Micro Mobility
• Scooter Sharing
• Dedicated micro concepts (e.g. iRoad)
“Car on Demand”
• Taxi / e-Hailing
• Transportation Network Companies
• Ridesplitting / taxi sharing
• Microtransit / dynamic Shuttle
Car Rental
• B2C
• B2B
• B2B2C
Parking
• P2P Parking
• Parking Apps
• Plan/Book/Pay case studies
Mobility Financial Services
• Car Finance (Ownership)
• Leasing (incl. flexible leasing)
• P2P Lending (incl. fractional ownership)
• Payment Services (Fuel Cards)
• SMR, Insurance
Integrated Mobility
• Multi-Modal Journey Planning
• Aggregated Booking
• Payment Solutions
• Multi solution offerings / partnerships
Mobility Categories
Mobility Mapping The Mobility ecosystem is expanding rapidly which in turn is creating new financing opportunities
Source: Frost & Sullivan
6
Carsharing
Round trip
P2P
One way
Corporate
Renter returns vehicle to same
parking lot / garage where rental
commenced (Station Based)
Asset light model;
connecting Lenders
with Renters
A company pool car,
managed by CSO,
made available to
all employees for
business (and
personal) use
Renter able to
leave vehicle at
any designated
parking space
(Free Floating)
Carsharing Market: Types of Carsharing Services, Global, 2015
Carsharing Definitions The market has been evolving since 2011 with tailored solutions being implemented as new use cases
created / new customer needs identified. Trip type and cost are the key variables
Source: Frost & Sullivan
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USA: 532,000 members
53,200 vehicles
France: 1.5 million members
99,573 vehicles
Germany: 162,000 members
18,000 vehicles
2014
P2P Carsharing Market: Members vs Vehicles, Europe and North America, 2014 – 2015
1
Netherlands: 165,000 members
21,500 vehicles
Spain: 85,710 members
7,321vehicles
Other Key Markets
2015
2
4
3
5
North America: Getaround, Turo
Europe: Tamyca, Drivy, Ouicar
Key Market Participants
Members
Vehicles
Top 5 P2P Carsharing Countries
0.32
1.00
0.03 0.08
0
0.2
0.4
0.6
0.8
1
1.2
NA EU
Mil
lio
ns
0.53
2.12
0.05 0.16
0
0.5
1
1.5
2
2.5
NA EU
Mil
lio
ns
P2P Carsharing Market Landscape P2P membership in EU and NA doubled in 2015 (2.65 Million) with vehicles being made available to
hire growing by 78% (214,367)
Source: Frost & Sullivan
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P2P Business Models – Making Money / Helping Others
Source: Frost & Sullivan
9
Private Lease: Market Presence, Europe, 2015
Low High Unknown
IT: Strong growth
expected in 2016
FR: LeasePlan to
reintroduce
Private Lease
NO: 30,000
Portfolio
NL: Private Lease
doubled in 2015 to
30,000;
SE: Private Lease
accounted for 11.5%
of new car registrations
in 2014
NO: Santander’s
Private Lease Brand
NL: Business Lease
launch privatelease.com
Market Innovation: Sharing
Economy & Private Lease
In 2016 Peer to Peer (P2P)
Rental expected to further
support private lease as likes of
GoMore, DriveJoy, easyCar
Club extend partnerships with
OEMs and Leasing Companies
to deliver new usage solutions
UK: Indirect Broker
market growing rapidly
DK: Market Leader
(strong relationship
with PSA)
Private Lease – A Growth Opportunity The Nordics, Netherlands, and UK are recording extremely strong growth in private lease; in 2016, this is set
to be maintained with markets, notably Italy and Spain, growing fast through white label bank partnerships.
Source: Frost & Sullivan
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1 Vehicle finance providers must stay relevant in order to meet the needs of the fast growing
base of Sharing Economy customers e.g. amend contracts to permit P2P renting, develop
new products to appeal to shared usage / ownership (Audi Unite)
2
FinTech is the catalyst driving forward P2P lending - it has the potential to become a hugely
disruptive force in the vehicle finance space. Incumbents cannot rely on regulation alone to
eliminate this competition since businesses built on innovation / best technology are well
positioned to adapt
3 Traditional car finance (ownership products) is being eroded as a result of usage; providers
will need to develop private lease offerings either through partnership or acquisition
4 Mobility, in Urban areas initially, is moving towards a pay-on-use, on-demand mix of
transport modes. A Mobility User won’t need long-term vehicle contracts but rather the
means to pay for Mobility Services
5 Don’t forget the used car market; huge potential for car finance providers to innovate and
bring the second hand car buyer into usage whilst also providing contingency against future
used car prices
Shift from Ownership to Usage: Key Takeaways
Source: Frost & Sullivan
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Thank You!
Graeme Banister Consulting Director
Automotive & Transportation
Direct: +44 (0) 207 915 7807
Mobile: +44 (0) 7889 029279
Email: [email protected]