Pete Kelly, Managing Director
03 February 2021
03 February 2021
Who would have thought that an economically devastating pandemic might be good for vehicle demand?
We have highlighted a renewed enthusiasm for personal mobility in previous blog posts and continue to be intrigued by the change in vehicle purchasing behaviour resulting from the pandemic. The risk of exposure to the virus has made many consumers shift away from public transport and look to their own vehicles instead. An interesting recent survey by Capgemini has shown a marked change in preferences over the year of the pandemic. Its findings are unambiguous: globally, people want to own and use a vehicle more than before the advent of COVID-19.
While consumer sentiment can be fickle, and surveys may be subject to various uncertainties, the repetitions of this kind of finding mean that the sentiment should be taken seriously. And if increasing numbers of people are keen to have their own vehicle, then we should expect an accelerated recovery in new (and used) vehicle demand. If we make some other assumptions – that the economic scarring from the pandemic will not be excessive, but also that the threat from the virus, though reducing, might not diminish completely for at least a couple of years – then this implies robust vehicle demand over the next two to three years.
But what would this mean for sustainability? For a number of years now, there has been a sense of inevitability with respect to the long-term decline in car usage in urban settings. Congestion is a universal negative as it wastes time and resources, while creating environmental and societal costs. Personal mobility is far less efficient and sustainable than shared mobility (especially traditional forms of shared mobility like public transport). The logic of this has not changed, but it would appear that the consumer has changed, for now a least.
Given these opposing trends, what can we expect in the immediate future?
We are entering a period of conflicted interests. This can be likened to a form of collective cognitive dissonance. While many consumers are aware that increased rates of driving are suboptimal (for the reasons stated above), they remain determined to use personal vehicles to avoid the risk of contamination from the virus. Ultimately – and assuming that normality does begin to return – the temporary need for the security offered by personal mobility is likely to be overcome by the permanent need to address sustainability issues, with the latter winning in the long run.
In the interim, another consequence may arise. If consumers are going to travel less efficiently for the time being, and possibly for several more years, policymakers may seek to encourage this to unfold in the least polluting way. To a large degree, electrification has already been identified as optimum way to achieve this goal. In other words, it is entirely possible the pandemic will provide yet another boost to the electric future of the automotive sector.