Financial institutions will need to rework their business models to remain relevant in a sector that is evolving away from traditional car ownership toward a more shared economy and autonomous future, panelists said at the Empire State of Mobility conference in New York City yesterday.
“From a financial services perspective, obviously the whole model of leasing a vehicle is changing rapidly,” Mary Chan, managing partner at VectoIQ, told Auto Finance News. “There is partial ownership in the picture, and how you think about those models — versus a traditional lease for five or six years — that’s an area where new models are coming.”
In addition to financial services, the insurance industry and others, will need to evolve with partial ownership models, she said. “What processes and policies need to be put in place in order to ensure this entirely new model,” she added.
As one example, Ford Motor Credit Co. experimented with a partial ownership model — its shared-lease concept based in Austin, Texas. The program piloted in March 2016, and ended less than a year later without signing up a single group, Communications Manager Margaret Mellott told Auto Finance News back in January.
However, as autonomous cars become mainstream, the captives and financial institutions “are going to have to play a part in [mobility],” said Sam Abuelsamid, senior analyst at Navigant Research. “They will have to get into some new business areas.”
