A recent Technavio study indicates China is the next big growth story in Carsharing, owing to an increasing need for mobility and accelerated urbanization.
There is heightened activity by local players like Car2Share, Car Clubs, eHi Auto Services, and Kandi Technologies. Also, this market is attracting foreign vendors who recognize the immense growth potential of carsharing in China.
It is a relatively untapped market where the population has exposure to both driving and automotive ownership. Consumer trends indicate that the Chinese prefer freedom to choose cars based upon their requirements at flexible tariffs. Embracing its social and environmental benefits, the Carsharing Market in China is expected to grow at a CAGR of 84.13 percent from 2013-2018.
Growing technological enhancements and trends in this market have resulted in developing attractive options for users. As such, these trends are a positive indication towards resolving issues like lack of consumer awareness that carsharing in China faces.
Bringing their market insights, Technavio analysts shed light upon 4 key trends currently influencing the Chinese Carsharing Market.
Enhanced Interconnectedness
Improvements in public transportation networks are driving the decline in vehicle ownership rates. The future prospects of public transport solutions are building consumer confidence in using carsharing schemes.
The situation is complemented by the convergence of transport operators and telecom operators. The collaboration of different industry sectors is shaping the concept of future mobility by providing seamless attractive options to users. This in turn is fostering the growth of the Carsharing market.
Also, the use of connected cars (cars equipped with internet access and wireless local area network), in carsharing is helping the market to flourish. It is gaining popularity as it adds to the experience and comfort of users. In addition, horizontal integration is acting as a big enabler in planning, booking, ticketing, traveling, and payment solutions. As a result people, vehicles, and infrastructure are increasingly connected.
Improved Communication System
Though Internet penetration in China is currently low, the situation is improving rapidly. Internet users in China are spending more time online thus paving the way for technology service providers and operators to enhance internet-based services.
This trend is aiding OEMs, who are increasing looking to incorporate newer and advanced technologies in their cars. This is acting as a catalyst for the Carsharing market in China, thereby intensifying the completion among vendors.
Telecom operators in China have recently launched 4G network, which is to be rolled out nationally in the short term. An increasing penetration of mobiles in China is also enabling easy customer access to carsharing vendors who are looking to offer services online.
CSOs (Carsharing Service Operators) are increasingly making use of cars with advanced telematics solutions and navigation functionalities.
Technological Integration in Mobility
Although the penetration of telematics in car infotainment services is low in China, it is expected to increase. The market is dominated by navigation and location-based type services. Technology solution providers and carmakers are offering innovative web-based solutions for facilitating the integration of devices such as smartphones with cars.
However, more sophisticated services are being introduced and adopted by consumers. Such advancements are going on to popularize the usage of connected cars. Future trends will also see the introduction of fully or partially automated cars eliminating the need for drivers.
Developments are also occurring in the field of communication systems. Online mobility booking agencies and payment engines are also emerging for hassle-free booking and sharing of cars.
Megacities and Car-Parking
The growing number of megacities is directly impacting the Carsharing market. Megacity is defined as areas of continuous urban development of over 10 million people. So, either it is a single metropolitan area or the convergence of two or more metropolitan areas.
Shanghai and Beijing have emerged as two of the fastest growing megacities over the past decade. Therefore, the rapidly rising population and growing proportion of urban residents across China is putting excessive pressure on the transportation system.
It is also leading to a shortage of parking spaces. As a result, cities in such regions are expected to see a decline in car ownership leading to the growth of the Carsharing market. Also, there will be a shift from cities designed around cars to cars designed around the cities.
One emerging trend is that OEMs are developing new vehicles and platforms and these cars incorporate features that make them city-centric. They are increasingly becoming part of carsharing fleets.
