Features
10 aoû 22

Status of mobility in APAC

Whereas mobility is, for Europeans or North Americans, a choice, supported by economic models (circular economy) or belief systems (sustainability, generation-specific requirements), this is not necessarily the case in APAC.

Non-car mobility is already a reality in Asia, be it for different reasons; nonetheless, business analysts predict massive growth of the Asian automotive market. Question is whether this is the right way forward, and which role the corporate fleet manager can play. First, a few facts to understand the status quo of mobility in APAC

The 5K barrier

Macro-economists use GDP per head to define which goods and services are likely to become affordable in a country. Companies like Starbucks do the same: in countries with an extremely low GDP per head, it is unlikely that consumers will be spending 5$ of more for a coffee.

In the automotive world, the $5000 barrier is used to identify countries with a potential to accelerate automobile sales and ownership. Asian countries are gradually exceeding this barrier, which predicts higher volumes of cars, mainly in India and ASEAN, joining China as APAC’s major car markets.

Urbanisation

More and more Asian people leave the countryside to go and live in cities to find better-paid jobs, better healthcare, and education. Urbanisation has many side-effects, such as an increased and accelerated need for infrastructure, mobility, social protection, and jobs. These need to be funded by economic growth, which Asia has been strong at for decades.

Nonetheless, many Asian new mega-cities suffer from infrastructure gaps, and availability of public transport and good road infrastructure is consistently lower than the need.

Digitisation and Tradition

Asia uses internet almost exclusively through mobile devices and on-demand has become the standard. It fits well with the region’s identity, as goods and services have always been delivered to the place of consumption, rather then procured centrally.

Whereas the West had to learn to order transportation, food and goods online, the transition from “shop” to “app” was consequently faster in Asia.

For the Fleet Manager

The presence of mobility solutions in Asia needs to be framed within these parameters. APAC has excellent alternatives to the car, provided by companies such as Grab, Ola, Gojek, DiDi or even Suica (Japanese payment solution). These companies go beyond delivering mobility solutions, but will also provide food, delivery and payments.

Asian businesses are growing, and global corporates are increasingly seeing value in expanding their APAC operations. Consequently, the need for mobility increases, and often, the first reaction is to increase the size of the car fleet. This leads to complex challenges that everyone who is managing a fleet in APAC will be familiar with.

Therefore, the better approach is to integrate mobility solutions in Asia, perhaps not in every city, for every employee or for all types of trips, but defaulting to the available mobility providers for urban transportation is definitely a better, cheaper and cleaner option than adding more cars to the already highly congested traffic.

Authored by: Yves Helven