IBM study says consumers want different car ownership options

Ford's pilot program for a fractional-ownership lease scheme uses an app to allow those involved to interact, as well as pay their portion of the vehicle's costs(Credit: Ford)

In an automotive consumer study presented at the North American International Auto Show in Detroit, IBM found that consumers expect to use cars differently and don't necessarily want to own one in the traditional sense – especially when the car has "self-enabling" technologies. Meanwhile, Ford has taken the lead in creating an alternative ownership model.

The IBM Institute for Business Value (IBV) developed its A New Relationship - People and Cars report, based on the study. According to the report, consumers have a high level of interest in "self-enabling cars," defined as cars that can learn, heal, drive, and even socialize. These are characteristics of autonomous cars (self-driving vehicles), self-repairing vehicles, and vehicles utilizing various forms of artificial intelligence to learn over time. The study is the second part of a series IBM has been conducting titled Automotive 2025.

Nearly 16,500 consumers in 16 countries were interviewed by IBM to determine how they expect to use vehicles in the next decade. This is in conjunction with the first report, which interviewed automotive industry and supplier executives.

The consumer interviews found that the clear majority liked the idea of diagnostic and preventive repair capabilities, with 59 percent of respondents liking the idea and 10 out of 16 countries placing it as a high priority.

The idea behind this is that as sensors and computing improves in the automotive industry, so will the ability of the vehicle to self-repair and compensate for problems, eventually leading to more and more self-repair options in future vehicles. This would include vehicles that can access the cloud and report information as well as gather updates for repair, another popular self-enabling option among many interviewees.

Some may find it surprising that the majority of consumers interviewed (67 percent) still think that the dealership, in-person buying model is an important part of the car-buying process. At the same time, 46 percent would consider buying online, direct from a manufacturer and 38 percent would do so from a third-party seller (such as a dealer or broker).

The other side are alternative ownership options. Personal cars still reign supreme among most of those interviewed, but more than a third (42 percent) would consider alternative ownership models like subscription pricing, and about a quarter (24 percent) liked the idea of fractional (shared) ownership. Another third would consider car-sharing or on-demand ride sharing as options. Consumers surveyed liked the latter two for various reasons, including retaining ownership but marking a return on investment when the vehicle is not otherwise being used.

On that final front, Ford has taken a leading role by creating a new pilot program for a shared car purchase option. This fractional ownership option allows Ford Credit buyers in Austin, Texas to self-organize into a group ownership model involving three to six people. This could be anything from a family with multiple drivers to a neighborhood or community organization buying as a group. Occasional-use vehicles such as pickup trucks are prime for this type of ownership, Ford says.

Lease groups can purchase a vehicle on a 24-month lease as a group and set up ownership fractions based on reserved drive times, maintenance costs, etc. Fractional payments from each party can be done through an app, which also tracks maintenance requirements, the vehicle's status and location, and facilitates communication between owners.

Sources:
IBM,
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