Attitudes to transport have changed dramatically since COVID-19 shut down it cities with social distancing severely restricting travel during the lockdown.
As a result, the use of public transport and rideshare services plummeted.
Now with restrictions starting to ease around the country, a significant discussion is underway on how the virus will leave lasting impacts in society, says Michael Higgins, managing director, Blinker.com.au
“Experts globally are predicting that people will be avoiding trains, buses, and ferries while we continue adhering to social distancing, ” he says citing a recent report from the UK which revealed that maintaining a two metre distance between train passengers in London would reduce capacity to only 15 per cent of normal levels.
“In Europe, easing restrictions have caused a surge in cyclists, forcing governments to add new cycle lanes around cities,” he said.
Higgins, however, argues that the biggest transport change is likely to be an increase in cars on the roads.
“In fact, the New South Wales government is already planning to open additional city parking to deal with the influx. But this doesn’t mean there will be a surge in car sales – on the contrary, people are now tightening the purse strings more than ever,” he says.
The latest figures from the Federal Chamber of Automotive Industries revealed that new car sales in Australia dropped a massive 48.5 per cent in April – the largest single decrease of any month since the figures were first recorded in 1991.
The decline signals a new normal for the automotive industry post-COVID-19, Higgins suggests.
“Consumers will be wary of taking on car loans, changes in work habits will see more people working from home, and cashflow will be a priority. These factors will lead to fewer full-time car owners, and an increase in flexible alternatives such as car subscription.”
Higgons told Which-50 that car subscription services such as HelloCars will continue gaining popularity as there is a shift away from the traditional model of car ownership. “Subscriptions allow you to get behind the wheel of a new car through small weekly payments and no lock-in contract, so you can return a car or swap it. For those of us isolating at home, it means avoiding the ongoing expense of insurance, registration and maintenance while your car is left idle.”
The partial pivot which Higgins believes is underway towards a subscription-based model provides an opportunity for companies like Blinker.com.au.which now allows car dealerships around Australia to offer subscription services.
“You can subscribe at your local dealer showroom, or directly from their website if you don’t want to leave home.”
Higgins says this is not only convenient for consumers, it also helps dealers digitise their business models. “Since the COVID-19 shutdown began, Blinker.com.au has seen an increase of over 50 per cent in inquiries from dealerships wanting to incorporate a subscription arm. This means even after the pandemic is over, if you are hesitant or unable to buy a car outright, you will be able to visit a dealership to subscribe rather than buy.”
The shift toward these flexible models for both consumers and the car industry has definitely been accelerated due to the current crisis, but we were already moving in that direction; says Higgins.
“Earlier this year, Frost & Sullivan released a report estimating that by 2025, six million vehicles will be sold through online platforms. Looking ahead, even after coronavirus, the fear of public transport, taxis and ridesharing will likely remain, but car subscriptions can help the public ease back into normal life.”