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Business / Auto China

'Sharing economy' makes inroads into car industry

By Gordon Xie / Angus Miller (China Daily) Updated: 2015-03-10 07:44

Have you booked a holiday using Airbnb or Tujia.com? Have you used an app to get around town? Or have you listened to Spotify or KuGou rather than purchase music?

If you have done any of these things, you have participated in what is frequently termed the "sharing economy", a collection of sectors that rely on access over ownership and digital platforms to connect demand with spare capacity.

This concept prioritizes providing consumers with access to a particular asset over ownership of that asset.

Car sharing alone is growing at double the rate of new car sales globally, but in China the concept is relatively unheard of. Major players are only just beginning to experiment with the concept here.

Car leasing, on the other hand, is a more traditional consumption model that also prioritizes access over ownership but enjoys greater awareness in China. Although leasing is on the rise, companies face significant challenges if they wish to draw Chinese consumers away from vehicle ownership.

What do Chinese consumers think about car ownership and the concepts of car sharing and leasing? PricewaterhouseCoopers' survey of new car buyers in major cities in China revealed the common reasons for not owning a car are cost (47 percent), lack of need (20 percent) and traffic congestion (17 percent).

License plate lottery systems are not a major hurdle with only 10 percent giving this as the main reason for not owning a car.

Awareness of car sharing in China is low but consumers are easily persuaded to consider it. Only 20 percent of survey respondents were aware of car sharing but more than half (59 percent) were willing to consider it after a basic explanation.

Of those still unconvinced, 47 percent changed their minds after a short "sales pitch", with the most favored benefits being its convenience and cost savings.

Popular uses for car sharing include "ban-day" replacement in Beijing (84 percent), leisure travel (65 percent), cost savings (55 percent) and business travel (48 percent).

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