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Monday, 22 October 2018 20:04

‘Dose of Reality’ Needed on Auto Market Predictions, Claims NADA Chairman

Written by Pat Sweet, Asset Finance International

 

Wes Lutz, chairman of the U.S. National Automobile Dealers Association (NADA), has called for a “dose of reality” about how the auto market is changing, arguing that claims stating that ride-hailing will replace personal vehicle ownership should be treated more skeptically than they are currently.

 

He also urged caution over whether self-driving cars will be implemented in large numbers and about dealers’ apparent lack of enthusiasm for electric vehicles.

 

Lutz said in remarks to the Automotive Press Association, “Each one of these narratives might sound right. But the truth is that each one is built on false or unproven pretenses.”

 

Lutz cited a study published in August by the AAA Foundation for Traffic Safety that calculated that the cost of relying on ride-hailing services as a primary mode of transport in 20 of the biggest metro areas in the U.S. was, at minimum, more than twice as much as the cost of owning a personal vehicle.

 

According to the analysis, the average driver in an urban area---the only setting in which using these services are a practical full-time transportation option---drives 10,841 miles per year. While urban drivers travel fewer miles than those living in smaller towns or rural areas, relying on ride-hailing services as a primary mode of transportation would cost $20,118 annually. This equates to more than twice the cost of owning a personal vehicle, even when factoring in the expense of fuel, insurance, parking and the vehicle itself.

 

Lutz said, “And if Uber and Lyft are dramatically more expensive than personal vehicle ownership, then people aren’t going to stop buying cars, and the auto industry isn’t doomed.

 

“Instead, people are going to continue doing exactly what they’re doing now: Owning a car or truck for day-in and day-out personal transportation and using ride-hailing services when it makes more sense than driving. That’s not a revolution. That’s an evolution.”

 

Similarly, Lutz said that the case for autonomous vehicles is built upon the premise that self-driving vehicles will be safer than humans.

 

He added, “Yes, there were 37,000 fatalities on the roads last year. But Americans drove more than 3.2 trillion miles. That means nearly 90 million miles are driven in the U.S. for every motor vehicle death. That’s 342 years of driving---24 hours a day, seven days a week, 52 weeks a year---between traffic deaths.”

 

Lutz also contested claims that franchised dealers are not enthusiastic about selling electric vehicles by questioning the assumption that dealers stand to lose out on service revenue.

 

We thank Asset Finance International for reprint permission.

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