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Car ownership not threatened by sharing services: Ghosn

Sharing is caring: While the advent of car-sharing services such as GoGet are predicted to disrupt the traditional car ownership model according to some pundits, Renault-Nissan chairman and CEO Carlos Ghosn thinks new-car sales will continue to grow.

China and India to also push new-car sales higher according to Renault-Nissan boss

12 Jun 2017

RENAULT-Nissan Alliance chairman and CEO Carlos Ghosn has predicted that the rise in car-sharing services will have little impact on the automotive industry and that ownership numbers will continue to increase on the back of emerging markets.

Speaking on the future of the auto industry at the University of Sydney last week, Mr Ghosn was adamant that car-sharing services including GoGet, Maven and others would never overtake the traditional car ownership experience.

“I know there are a lot of theories that all these are going to substitute (ownership) and we want to have less cars on the street,” he said. “This is not going to happen.

“First, car buying is not only a rational buy. You don’t buy a car like you buy a refrigerator. It’s a completely different logic. A lot of people buy cars they don’t need.

“They are much larger than they need, more powerful than they need. People buy cars, driving at 250km with acceleration from zero to 100km in three-to-four seconds, but they never use them.

“So the car buying is not only an irrational buy, there is an emotional buy.

There is a status buy and this can continue.”

Mr Ghosn explained that new-car sales around the world were trending upwards, with the 2017 year-end tally projected to be around 95 million units sold, about three million more than last year.

However, while Australia’s new-car market is shrinking in 2017 – year-to-date sales of 465,381 is 0.9 per cent down compared to the same period last year – Mr Ghosn said he predicts the continued global growth will come from emerging markets such as China and India, instead of continued growth from established car markets like Australia, the United States and Europe.

“Australia is one of the countries with the highest level of motorisation in the world,” said Mr Ghosn. “United States comes first with 800 cars per 1000 residents, Australia comes at 700 cars per 1000 residents – far ahead of Japan, 600, far ahead of France, Germany, UK, any other country.

“The emerging market… China, is about today at 200 cars per 1000 habitants.

India 50 cars per 1000 inhabitants. Indonesia 20 cars per 1000 habitants.

“All these countries are going to catch up and this is going to ensure for many years to come the product.”

According to Mr Ghosn, almost 19 million new cars sold in China are to first car buyers, representing more than two thirds of new cars sold on the market.

“China today is the largest car market in the world with 27 million cars sold every year,” he said. “From the 27 million cars sold every year, 70 per cent are buying a car for the first time.

“So you have a huge mass of people who never owned a car and for them, buying a car is a great event, it’s going to transform their life, social life, professional life, education life.

“So these generations, these mass of the population… which do not enjoy anything of the advantages of the car industry, are coming and this is not going to stop. This is going to fuel the development of the car industry for many years to come.”

However, Mr Ghosn also conceded that share car numbers would grow, but not enough to threaten car ownership figures.

“When you look today about how many cars in the world are shared compared to how many cars are owned and not shared, it’s 99 to one,” he said.

“So is the one per cent going to increase? Maybe two per cent, three per cent, etc. It’s already huge numbers, but this is not a substitute to the other.”

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