Why Are We Buying Fewer Cars?

In recent years, the global auto industry has been experiencing a decrease in worldwide sales: COVID-19 notwithstanding, global auto sales are estimated at 59.5 million in 2020, a 20% year-on-year decline.

Global Car Sales: 2010-2020

_Note: 2010-2018 period shows annual average._Car sales were estimated to reach 80 million in 2019, but ended up down on the year; 2020 is expected to show an acceleration of this decline as the COVID-19 lockdowns and its wider economic malaise cause consumer purchasing pullbacks. Restricted mobility is lowering demand for public transport and air travel, but people are not necessarily moving less. Enthusiasm for bikes and scooters (especially in dense urban areas) shows that alternative modes are being sought.

New trends are emerging within the space of weeks, such as micromobility OEMs (e.g., e-scooters, e-bikes, etc.) that are pivoting to direct-to-consumer sales instead of via B2B. The ubiquitous mobility sharing platforms (e.g., Lime) are also adapting revenue models to consider new consumer needs by offering daily, monthly, or even yearly rental plans.

Economic crises aside, there are other underlying reasons contributing to a reduction in the volume of car sales. First, players from different regions and industries - normally outside the traditional automotive set - are gaining ground. The automotive industry has become appealing for a wider pool of investors: tech companies, venture capital funds, and private equity players. New stakeholders are dominating investment volumes in automotive and mobility startups.

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