There are many factors influencing the way we do travelling, like environment constraints, income level, information technology, urbanization, and even the social culture. For China, the 60% urbanization policy will see a mega change of the transportation mode for hundreds of millions. Car makers, energy suppliers, infrastructure provider, insurance company and local transport administrator will play their own parts during this process. Market research leader TNS launched a research recently with Bipe, a France based consulting firm to study the demands of mobility through different countries and how it evolves in the future. Kelvin Koh(picture below), associate research director shared his insight and interesting findings of this research with Gasgoo.com.
Q: Chinese auto market is called as policy-dependent market. The government has a strong intervention force on the market. Could you please share your opinions on the influences led by policies on future travel mode and give us some examples?
Kelvin: So far, the most influenced macro-economic policy is the urbanization target set by the Central Government to 60% by 2020, which means, more than 100 million rural dwellers will become urban residents. Their travel mode will be greatly changed: First of all, more and more people will buy cars as income increases (from our study we have also seen that car usage is more prevalent among higher income levels.) and at the same time, more people will use the public transportation system. All of the changes will in turn challenge the urban planners and affect policy makers.
In fact, any policies in any market may cause direct or indirect influence on people’s travel mode. For example, traffic controls and purchase restriction will lead to sales decrease in private cars while the increase in parking fee and gasoline will indirectly decrease the demand for purchasing and using cars. Likewise, incentivising new energy vehicles will also encourage more people to adopt its usage, however the issues of charging points availability, the duration for charging the battery and mileage are very real issues that affect the adoption rate.
Q: information technology has greatly increased communication efficiency and significantly changed shopping mode, which will decrease the demand for going out. With the development of IT, will the demand for personal mobility drop?
Kelvin: There’s nothing to worry about. I believe Consumers will in fact be able to spend more time on leisure and other more meaningful activities.
Consumers still prefer experiential activities. The intention of technology is to improve people’s lives through increasing efficiency, therefore saving time for experiential activities. Even though shopping online is convenient and efficient, it’s different from real shopping after all. Consumers can’t see, touch, smell the product or breathe the air outside. Therefore, the total demand for mobility won’t be reduced.
Q: Is there any results regarding driverless car? What is the future commercialized prospect for driverless car?
Kelvin: I believe driverless cars will be the next big thing. We have seen more and more major IT companies working with car manufacturers to develop the “connected vehicle”，therefore once the infrastructure for driverless cars has been set up and becomes a possibility. The opportunities to communicate with consumers in their cars through their infotainment systems will increase.
Q: What are the common characteristics for cities with higher public transportation usage?
Kelvin: We have summarized three common points.
First of all, the commuters in tier 1 to 3 cities all spend significant amount of time traveling for work (more than 400 minutes a week): high population density, traffic congestion and ever increasing housing prices in the downtown areas (causing people to move further away) are many causes of long commuting times.
Good infrastructure: About half of respondents in tier 1 cities have access tosubway and bus stop within 10 minutes walking distance while buses are the most common mode of public transportation. In the mobility study we see that travel time increases from tier 1 and peaking in tier 3. The combination of population density and infrastructure development plays a big part in travel times (tier 3 cities are usually cities without metro).
Finally, convenient and cheap public transportation: the trade-off for taking public transportation rather than driving in urban cities where parking is an issue and traffic congestions would make the public transportation more attractive. Restrictions (Car number plate and non-local plate restriction) and cost of parking are also trade-offs for taking the public transportation.
For example, driving into CBD costs SGD $4 (CNY 20 Yuan) in Singapore. The parking fee is SGD $4/h-$6/h (CNY 20-30 Yuan). The driving cost for whole day will be over a hundred. Thus, most of the residents choose public transportation instead of private cars. At the same time, the outstanding hardware and software facilities of public transportation in Singapore attracts more passengers to experience the convenient travel.
Q: The China market is unevenly developed, with phenomenal differences of economy level and geographical condition seen in various provinces and cities.How does your finding reveal different travel patterns and evolutionsin different areas?
Through our Mobility study we discovered that infrastructure development plays a big part on travel behaviour. Commuters in tier 1 & 2 cities are 2 to 3 times more likely to use the public transportation compared to lower tier cities. In fact, using cars as means of transportation is consistent across all city tiers and constitute only 1/3 (or less) of a persons' daily travel. While motorcycles are used more frequently than cars in tier 4 and below cities. Why is that so?
Transport infrastructure in tier 1 cities like Beijing and Shanghai are well developed and very much like other international cities in New York and Singapore - as a result, it’s easy to get around. Similarly, traffic congestion and the increase in cost of car ownership like parking and gasoline have forced some people to choose the public transportation system instead of driving to work. Moreover, some people are willing to choose greener modes of transportation like riding bicycles or walking due to heightened environmental awareness.
On the other hand, lower tier cities with less developed public transportation systems are looking to other modes of transportation. Having a vehicle of theirown is by far the most convenient and popular. However they do drive lesser than their urban counterparts in higher tier cities. For instance in cities like Inner Mongolia, point to point travel depend highly on automobiles or motorcycles.
Q: What’s the latest development and trends on car rental and sharing?
I see both as supplementary means of transportation to alleviate travel issues or to improve travel experiences as well as a way to “own” a car without the hassle and costs of a real ownership.
Car rental and car sharing are alternative means for consumers who want to own cars but are unable either because of economic reasons or due to regulatory restrictions. A probable development for car rental companies is to tap on self-drive business travel or tours which are popular overseas and has a promising potential in a big market like China. While car sharing services serves people who want to get from point A to point B therefore the development could be a potential for business travellers coming from another city or traveling within cities.
