Question

The auto industry is currently undergoing a few significant changes around the world. Three of the most significant changes happening now and likely to evolve further are: Development and popularity of ride-share services like Uber Development and increasing adoption of electric vehicles (EVs) Development of autonomous driving On top of the above three industry-specific trends, other long-term socio-economic trends are happening in almost all parts of the world. In addition to these long-term trends, supply-chain issues have also impacted the last two years. It is 2023, and a major global car company has hired you to help them estimate the overall market size (in units) for light vehicles (cars, SUVs, and light trucks) in the US in 2035. Using no more than 500 words, please estimate the market size for light vehicles (in units) in 2035 in the US and explain the rationale behind your estimate based on the three factors above plus socio-economic trends.

Answer 1

The market size for light vehicles in 2035 in the U.S. will be influenced by the rise of ride-sharing, electric vehicles, autonomous driving, and globalization.

Step-by-step explanation:

Estimating the overall market size for light vehicles in 2035 in the U.S. requires accounting for several factors, including the rise of ride-sharing services, the increasing adoption of electric vehicles (EVs), advances in autonomous driving technology, and broader socio-economic trends including globalization and supply-chain issues.

The development and popularity of ride-share services like Uber could decrease the necessity for personal vehicle ownership, thereby potentially reducing the demand for new light vehicles.

On the other hand, the increase in electric vehicle adoption could spur a wave of older gas-powered vehicles being replaced by EVs, maintaining or increasing the market size in the process. Additionally, the ongoing development of autonomous driving could lead to both an increase in shared vehicle use, and a possible surge in demand as new vehicle forms and uses are developed.

Broad socio-economic trends are also critical to consider, such as the aftermath of economic downturns, which have historically impacted consumer behavior towards vehicle purchasing and preferences. The 2008 crisis, for example, saw a shift away from large SUVs towards more fuel-efficient and environmentally friendly vehicles. Moreover, globalization has intensified competition within the automotive industry, as multiple international brands compete within the U.S. market.

Considering the factors mentioned above, the overall market size for light vehicles in 2035 would likely be influenced by a combination of reduced personal vehicle ownership due to ride-sharing and autonomous vehicles, offset by a potentially increased demand for electric and technologically advanced vehicles. The emergence of the COVID-19 pandemic showed that global shocks could shift industry dynamics rapidly. Therefore, it's reasonable to assume that while the number of units might remain stagnant or see moderate growth, the types of vehicles that make up the market in 2035 will look substantially different from today.