The future of the auto industry lies in car sharing, Chinese executives say
Several Chinese auto and transportation industry leaders are preparing for a future in which people share cars, rather than own them individually.
"(The new generation), they're not interested in the ownership. They're probably more interested in accessibility," Freeman Shen, founder and CEO of Chinese electric car company WM Motor, said last week at CNBC's East Tech West conference in the Nansha district of Guangzhou, China.
Technological advances in the last several years have aided the rise of multibillion-dollar ride-hailing giants such as Uber and Didi. They, in turn, have challenged the traditional taxi driver system and cultivated a habit of on-demand car services for tens of millions of users globally despite ongoing safety concerns. Traditional automakers, many already trying to navigate rising interest in the electric vehicle market, are paying close attention to the ride sharing trend. Notably, General Motors is testing the waters with its own rental program.
In China, Feng Xing Ya, general manager of Guangzhou-based automaker GAC, also said the future of the auto industry lies in car sharing.
"(It's) a challenge for the auto industry because people may buy fewer cars," Feng said in Mandarin, according to a CNBC translation, during a Nov. 27 conference session.
Without giving much detail on a plan, Feng said he favored a strategy of entering — rather than avoiding — the car sharing economy, which he said can still generate a lot of income for a company.
However, such a rapid change in consumer tastes could give start-ups an advantage.
Shen, formerly a director at Fiat Chrysler and Chinese automaker Geely, said traditional automakers are too focused on selling cars rather than improving user experiences. He said his company's focus on software and newness to the market means he has everything to gain and little to lose from a shift to ride sharing.
Shen founded WM Motor — which stands for "world champion" in German — in 2015 and the company has received more than $1 billion in funding, according to Crunchbase.
The rise of car sharing may also lead to new kinds of living environments in China as Beijing tries to encourage technological and urban developments through "smart cities."
"If we can allocate the seats instead of vehicles ... then we can use the transportation system more efficiently," Henry Liu, vice president, chief scientist of smart transportation at Didi, said during a conference session.
"If you think about the future city, I think the future city will have much less in terms of parking spaces, road spaces, because we don't really need that much of spaces for vehicles," Liu said. "At that moment, I think we have an autonomous vehicle fleet. And they can serve the transportation demand."