Driverless Cars Could Reduce Auto Sales by 40%: Analyst

Driverless cars are set to make a big impact in the automotive industry. 

One analyst believes that the technology could reduce auto sales by as much as 40 percent in the next 25 years, due to the ability to share the driverless cars. The Barclays PLC analyst, Brian Johnson, also believes that vehicle ownership rates could fall by almost half as families move to owning just one vehicle per household. As a result, Johnson notes that driverless cars will likely travel twice as many miles as current vehicles, since they’ll be transporting each family member during the day.

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If driverless cars do get quickly adopted by the general public and the infrastructure is there on the roadways to support the technology, large-volume automakers will have to rethink their production, with Johnson going so far as to say they “would need to shrink dramatically to survive.” Just how much would companies like General Motors and Ford have to reduce their production in order to survive? Johnson believes 68 percent and 58 percent, respectively.

Boston Consulting Group believes that the market for autonomous vehicles will grow to $42 billion by 2025 and self-driving cars will eventually account for 25 percent of global auto sales by 2035.

“While extreme, a historical precedent exists,” Johnson wrote. “Horses once filled the many roles that cars fill today, but as the automobile came along, the population of horses dropped sharply.”

[Source: The Detroit News]