Volvo CEO: car sharing will dramatically impact the automotive market

Volvo CEO Håkan Samuelsson believes the growth in car sharing will cause the world’s car market to split into four main sections.

Speaking at the launch of the Volvo S90 L in Shanghai, Samuelsson said the most popular form of car usage in the near future will be short-term rental.

“Like [ride-hailing services] Uber and Lyft, our role will soon be to provide autonomous cars that are part of that sort of mobility,” he said. “That’s why Volvo has partnered with Uber to grow in this area of the market.”

Samuelsson said the second most popular form of car usage would be peer-to-peer sharing.

“If you need mobility for a longer time, maybe a week, we think there will be a market for car sharing, which we are already exploring,” he said. “While we develop into peer-to-peer car sharing, we must develop car connectivity, because these two are heavily linked.”

With connected cars, it will become convenient to use a smartphone app, for example, to request a car. This sort of car usage will still be relatively short term, so Samuelsson believes it can’t cater for people who want to own a car for longer periods of time.

“When you want your own car, people will use a form of subscription, where they pay a monthly fee, like you do for a phone contract,” said Samuelsson.

He suggested that this sort of contract would be similar to personal contract purchases (PCPs), which are already the most popular way to buy a car in the UK today.

Samuelsson explained that the more traditional purchasing of a car would therefore become the smallest contributor to the new car market.

“Of course, in parallel to this will be the traditional buying of a car, but it will not be the main way anymore,” he said. “Some people will always want to own their own vehicles.”

Also read: Volvo Cars and Uber to jointly develop autonomous driving cars