“A golden opportunity for the auto industry.” This is how KPMG LLP, the audit, tax, and advisory firm, characterizes the projections in its latest research study. Titled “The Clockspeed Dilemma” — a reference to the varying pace or clockspeeds to which automakers must adhere to maintain their traditional production activities while at the same time attempting to keep up with high-tech innovations — the study projects personal miles traveled (PMT) growing by as much as one trillion additional miles per year by 2050, while total vehicle miles traveled (VMT) could soar to even higher levels.
This appears to be a complete contradiction of the views Samuel I. Schwartz expressed in his book Street Smart: The Rise of Cities and the Fall of Cars, which we reported on in this space last month. Provided that Millennials stick to their driving habits for the next 25 years, Schwartz writes, total vehicle miles traveled (VMT) would be less than it is today. However, aside from the small discrepancy in the timeline, Schwartz singles out Millennials, while the KPMG report focuses on “older” and “younger” cohorts, i.e., 45-to-75-year-olds and 10-to-15-year-olds.
The cause of these two demographics packing on the miles, according to KPMG, is the advent of autonomous cars and the growth of mobility services like Uber and Lyft. Both age groups are doing the traveling, but neither group is doing the driving. The report points out that those in the older group have concerns for the safety of their driving as they age — and so do their children. Using mobility services or future autonomous cars alleviates those worries.
As for the younger set and their parents, mobility on demand spells additional freedom. For the kids it’s the freedom to meet friends and attend sports or other extramural activities without depending on a parent to do the driving. Parents, finally relieved of doing taxi duty, will have more free time.
VMT has shown a positive correlation with demand for auto services such as car washing. But, in the past, growth in VMT has also been associated, to some degree, with growth in the number of vehicles on the road. All those added miles predicted in the KPMG report, however, do not necessarily mean more cars on the road. Rather, the miles will add up through more trips per vehicle whether a hired car like Uber or a car-share vehicle like a Zipcar.
There may be doubt about future growth in vehicle population, but if KPMG has gotten it right and the demand for mobility services is set to dramatically expand, car washes can expect a segment of the market to wash far more frequently than in the past. Any mobility-service driver who values his business will ensure that his vehicle is clean and shiny at all times.
The predicted increase in miles traveled, KPMG says, will likely have a profound but unknown impact on vehicle sales, car ownership models, energy demand, and infrastructure. “They represent an additional trillion miles of new mobility options and the potential for new business models to satisfy them.”
The foregoing is but a limited synopsis of material in the report that might be relevant to the car wash industry. As a look into the future of the automotive world, the report makes for fascinating reading. You can view “The Clockspeed Dilemma” at http://info.kpmg.us/content/dam/kpmg-im/automotive/auto-clockspeed-dilemma.pdf.