Brand Not Important In Sharing Economy

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Ricky Tay Vollkswagen

WHILE THERE is a lot of talk about electric vehicles and autonomous vehicles, not everybody wants to go down the electric vehicle route, says Ricky Tay, Managing Director, Volkswagen Group Singapore.

“Currently, EVs are more expensive as they are not mass produced. For an EV to sell reasonably well, it cannot be more than 15% higher in price than a car with an internal combustion engine (ICE).

Tay, an industry veteran who has also worked in China, Malaysia and Japan, reckons that within a decade demand for EVs will grow exponentially.

That will mean the business models will have to adjust to the needs of the new EVs.

“There will be more electricians in our service department than technicians,” Tay points out.

“The EV has a simple design and will require less servicing. Our after sales will drop by about 20% so we will have to develop other sources of income.”

Compounding the issue is his observation that the X, Y and Z generations do not want to own cars. “They are time efficient. Many don’t even have a driving licence. They will opt for ride sharing.

“Nobody buys an expensive car for sharing.”

Tay sees a consolidation taking place in the industry. “The shift will be towards rental, leasing and sharing companies. I’m not sure if people will buy a car by brand eventually. So, what you provide as a service will become important.”

Focus — Roll In The Changes: Views from the automotive industry.

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