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March 25, 2015

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Car owners may seek mobility solutions

GROWING traffic congestion may force one third of car owners and would-be buyers in first and second-tier Chinese cities to opt out of car ownership, making room for new mobility solutions like car sharing, consulting firm Bain & Co said in a study published yesterday.

“The status and flexibility that comes with having a car is, for many, no longer worth the hassle and increasing costs,” said Pierre-Henri Boutot, Bain partner and co-author of China New Mobility Study 2015, which surveyed over 2,100 consumers in Beijing, Shanghai, Shenzhen, Shenyang, Chengdu, and Wuhan.

“Increasing income level in China mean that consumers are able to afford the comfort of a personal vehicle, yet many are interested in alternatives to car ownership.”

On the other hand, 40 percent of survey respondents said they were willing to try new mobility options, such as car rental, ride sharing, and car sharing.

While Internet companies are taking a lead in this field by setting up online platforms and combining mobility resources, carmakers are quick to play some catch-up, with pilot programs like offering leasing in Chongqing, Hangzhou and Shenzhen.

Their location choices are based on population density, and taxi prices are an important benchmark for market potential.

Though car-hire services, a form of peer-to-peer ride sharing that borders on taxi, is deemed “illegal” in China in some cases, they still find room to survive and thrive, via taxi-hailing apps like Uber, Kuaidi and Didi.

“At least the local governments are not shutting those services down completely,” said Raymond Tsang, who co-authored the study.




 

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