• Jan 28, 2013
The mood at the 2013 North American International Auto Show has been more than upbeat for automakers. Lots of new models and concept cars have been unveiled and automakers think it will be a good year for a solid sales increase. Quartz writer Tim Fernholz looked at it from another angle, raising some big questions. What if this post-economic crisis renaissance is short lived? Is the world approaching "peak car" – when demand for cars declines? And will the role of manufacturers change from automakers to "enablers of mobility?"

The International Transport Forum at the Organisation for Economic Co-operation and Development (OECD) reports that growth in total vehicle miles traveled has been steadily declining since the early 2000s across the developed world. As the chart above shows, in the US, car trip miles may have peaked in 2007 and declined ever since, according to Advisor Perspectives.

Fernholz sees several possible reasons for this global trend – the increasing cost of fuel, insurance and parking during a time of stagnant wage growth; government policy changes emanating from concern over climate change and pollution; attempts to reduce urban sprawl in places like Beijing; and social and cultural changes. Communications technology breakthroughs mean less people commuting to work and leisure and urbanization is replacing suburban sprawl in some areas. Then there are young people with much less interest in buying cars – the car isn't the same status symbol or rite of passage for Millennials as it has been for Boomers.

Ferholz points to Ford as an example of global automakers starting to accept changing social trends in the developing world. Last year at a media conference, Sheryl Connelly, the company's futurist, walked journalists through a number of the trends mentioned above, and defined Ford's mission as a transition from an automaker to "enablers of mobility." Ford is adapting to cultural trends through actions like a partnership with Zipcar to reach young consumers more interested in vehicle access than ownership. We've heard this sort of thing from Ford before, and we'd add Daimler to the list, mostly because of it leadership in Car2go.

Other car companies have comparable strategies for dealing with what they're calling "global gridlock." Over the coming decades, perhaps the most interesting aspect of the "auto" industry is how their identities transform from vehilce manufacturers to enablers of mobility.


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    • 1 Second Ago
  • 29 Comments
      mylexicon
      • 1 Year Ago
      If everything stays the way it is now, car sharing will be an inevitability. New vehicle costs have risen sharply and median household income has been stagnant or declining for a decade. People cannot afford to own any vehicle; therefore, car-sharing seems like a convenient solution. But what is the likelihood that the current economic paradigms and auto manufacturing paradigms will remain unchanged in the long term? 0% Platform streamlining and carbon fiber reinforced polymers have the capability to take a huge bite out of vehicle production and vehicle development costs. Hybridization technologies have the ability to make these new vehicles hyper efficient. If vehicles have lower MSRP, reduced insurance costs, and reduced fuel costs; excess transportation capacity no longer becomes a major concern for drivers. Car-sharing loses its economic mandate. Doesn't mean car sharing won't be part of the future, but it will require a major culture shift by drivers.
      2 wheeled menace
      • 1 Year Ago
      Peak car is here. 50-70 years ago, a car was a freedom machine that opened up amazing possibilities. Now it is an expensive to operate and difficult to maintain liability and most American cities are built around owning one, so you must have one. Energy prices as a result of scarcity will do cars in. A 3000lb steel box can only be the prime mover for so long.
      Spec
      • 1 Year Ago
      Many people are in denial of this but our economy has fundamentally changed. A person flipping burgers or working at Wal*Mart simply cannot afford a car, insurance, and the gasoline needed to fuel it. The middle class has been squeezed hard and we have lots more poor & unemployed.
        sirvixisvexed
        • 1 Year Ago
        @Spec
        When could burger flippers support a whole family? Or people who worked stocking shelves at a mom and pop? IMO, it's *people* that have changed. Employees raising employees raising employees generation after generation. The education system is part of the problem as well. No matter how loud I scream that I know self employed house cleaners, lawn cutters, office cleaners, power washers, window cleaners, floor cleaners, who needed zero formal education to do what they do, but end up making $20/hr+ because they work for themselves and price by the job, not by the hour, people won't hear me because everyone is obsessed with working for other people and have trained themselves to be blind to real opportunity.
          EZEE
          • 1 Year Ago
          @sirvixisvexed
          Ricardo - the USA spends more per child than most other countries, but as I stated, not much bang for the buck when you teach self esteem without accomplishment, 2+2=5 if you really want it to, and gender studies is a good choice for a college degree. We teach nothing is black and white (meaning, a person can know nothing), there are no standards by which to judge (nothing is right nor wrong), and that views can change to meet the needs of the moment. Then we are surprised when people don't want to hire someone who believes that nonsense to build microchips, pour steel, or a rocket. As a former rocket scientist, there are rigid standards, everything is black and white, and there is certainly right and wrong. Watching a rocket tumble out of control and then blow up, we knew, something went terribly wrong, and that standards had not been met.
          Ricardo Gozinya
          • 1 Year Ago
          @sirvixisvexed
          Public education has always been about teaching kids to conform, to be good workers. That was its intent from the beginning. It's just that now, art and science get cut time and time again, because while everybody wants kids to be able to get a good education, nobody wants to pay for it.
          EZEE
          • 1 Year Ago
          @sirvixisvexed
          What, you don't mean omsaynthat the generation coming of age that was taught that 2+2=5, if you really want it too because for it not too would hurt your self-esteem,mthat later went on to get degrees in gender studies, can't find a good paying job? Outcome based education doesn't produce good outcomes? Who could have EVER predicted that? Who, O, WHO could have ever said that this style of education will produce people with no skills but a sense of entitlement that they should be handed a job, or b able to get a job flipping burgers and make $50,000 a year? The mind boggles at such complexities. And, OMG, you mean to tell me the place we can buy a coach at made by slave labor in foreign countries does NOT pay its employees $75,000 to stand at the door, and say, 'Welcome to Wal-Mart', and still maintain those low, low prices? You can't just get ANYBODY to say 'Welcome to Wal-Mart!' That takes years and years of training! Whoa, used up my allotment of sarcasm for the day....
      DaveMart
      • 1 Year Ago
      'Peak cars' are only contemplated for the OECD. World cars are projected by everyone to keep right on rising.
      • 1 Year Ago
      My 11 car finally needed to be replaced. Wow was I in for a surprise. Who can afford to buy a new car. Looked at a new ford edge 33,000. And then there was a fully loaded one for 42,000. Crazy totally crazy. Wound up buying a 8 month old rental edge with and extended warranty to 75000 miles. Still paid 23000. Crazy, love the way it drives and handles but trim finish is nothing to brag about and definitely not worth $23000 let alone $33000.
      Witness
      • 1 Year Ago
      Did I not send that memo?! Cars have ALWAYS been basic mobility to me. Well, there is one exception; I bought a motorhome. But for the most part I get around just fine in my $15K Hyundai.
      Actionable Mango
      • 1 Year Ago
      What the hell is an "enabler of mobility"?
        Vlad
        • 1 Year Ago
        @Actionable Mango
        Sounds like management speak. "We will sell less cars" just doesn't sound quite right.
        Spec
        • 1 Year Ago
        @Actionable Mango
        Sounds like those Rascal or Hoveround scooter ads on Fox News.
      brotherkenny4
      • 1 Year Ago
      They have trained the Americans to consume to their peak ability. This is not unexpected. They cannot drive any further because individually they have maximized their ability to earn and spend. You do know that most americans have no savings, more debt, and work more. We have been wonderful followers of the wealthy and taken their direction to spend to heart. We see articles which describe us as consumers constantly and are made to believe that consumption is our patriotic duty. Well, we bought it, and now we have reached the limit, because it's not like most americans have made a decision to be frugal. They have been forced to this by their own personal limitations.
      EZEE
      • 1 Year Ago
      Peak car is not here. India, china. Hey Jon! Look at this: note, if you blog on this, Ford Perfect's head will literally explode off his shoulders. http://p.washingtontimes.com/news/2013/jan/24/frackings-rise-in-us-inspires-the-world/
      MTN RANGER
      • 1 Year Ago
      Maybe car owners are being more sensible and moving closer to their work locations. Shorter commutes are better for congestion, environment, quality of life, etc.
        brotherkenny4
        • 1 Year Ago
        @MTN RANGER
        Or maybe they spent all their money on guns. You know, AR15s are not cheap.
        2 wheeled menace
        • 1 Year Ago
        @MTN RANGER
        A lot less people are employed these days. The unemployment numbers are deceiving.
        Dave
        • 1 Year Ago
        @MTN RANGER
        Or maybe theyre unemployed and have zero commute.
      SpeedyRacer
      • 1 Year Ago
      This is a gross misinterpretation of data. Auto sales dip in every recession. We have been in a depression since 2008. Auto sales are already showing signs of recovery. There is no loss of interest on the part of young people to buy cars. Only a loss of their ability to do so.
        Vlad
        • 1 Year Ago
        @SpeedyRacer
        Anecdotally, looking at the recent college grads at work, the desire to be free of a car is huge. They all own cars, of course, there is no way around it. But most everybody is choosing to live close to shopping/entertainment/work - i.e. in the city. Mind you, they are all well compensated, and we hired people all through the recession. Also, looking at the home price dynamics in the city and in the 'burbs, demand for properties by public transit is here now. Condos by metro dipped a couple of percent max even in the depth of recession, and are now way past 2008 levels. Outer suburbs still have not recovered. If people do in fact decide to live closer to... things , it will not necessarily dramatically drop the number of cars, but it will drop the number of miles driven - and that's what the graph shows.
          mylexicon
          • 1 Year Ago
          @Vlad
          The graph shows dips during the 1973 oil crisis, 1979 oil crisis, a flat line during the Gulf War, and a crater during the oil crisis of 2008 and the Great Recession. Peak travel is sensitive to proportional changes in the price of oil. Furthermore, the prolonged dip in peak travel is likely the cause of high unemployment and high per-mile fuel costs. I know people regard sprawl as morally corrupt, but sprawl is addressing another economic corruption called real-estate scarcity. The reason most re-urbanization attempts have failed is b/c city planners protect land-lords at the expense of tenants. Urban planners waste all of their time educating suburbanites why city life is advantageous to suburban life--a message that has only borne fruit in the temporary era of McMansioned Gen Y children. The current uptick in reurbanization will not be sustained unless urban planners pull their heads out of their asses, and begin addressing urban real-estate scarcity, which also injects unnecessary commercial risk. To date, nearly everything they have tried has made matters worse. Rent controls are a prime example.
          mylexicon
          • 1 Year Ago
          @Vlad
          Sprawl is not self-defeating. Quite the opposite. The farther away you travel from the city center, the better real-estate and housing values become, and the better safety becomes. The cost of transportation and water infrastructure is practically irrelevant compared to real-estate value for money and security. In fact, urbanization relies on catastrophic market-failures and cultural upheaval to exist in the modern era. Marriage and birth rates must plummet. The burbs must be poisoned with credit-induced price inflation. Private companies and governments must fail to create basic suburban-urban transportation, like busing, which has low capital costs and utilizes existing infrastructure. Lack of long distance mass road transportation not only forces people into the cities, it also forces business to remain in cities, since city-dwellers lack car storage capabilities and have no long-distance road transit. I suppose you could argue that sprawl also relies on catastrophic market and regulatory paradigms--the complete inability to address scarcity. Unfortunately, neither the market nor regulators have ever cracked the scarcity conundrum. Sprawl has existed for quite some time. With dilapidated urban infrastructure, many urban areas have the ability to address scarcity, but few municipal administrators seem willing to do anything.
          Vlad
          • 1 Year Ago
          @Vlad
          @mylexicon, There is no question that high oil prices and low income tend to reduce miles driven. But there is no law that says it has to be the only factor. Where I live I don't see re-urbanisation attempts failing. Quite contrary, formerly bad neighborhoods get bought out and developed. And no, sprawl isn't necessarily morally corrupt - it is just a self-defeating model. You simply cannot build enough roads to funnel people from wider and wider suburban area into the same city core. There is not a single car-centric megapolis not suffering from unbearable traffic.
          Spec
          • 1 Year Ago
          @Vlad
          @mylexicon Or it could be related to the fact that the price of oil has gone up by 5X since 2000.
          mylexicon
          • 1 Year Ago
          @Vlad
          Peak travel has risen since 2000, and it's still higher than year 2000. Obviously, 500% oil price increase since 2000 is not the motivating factor. Price spiked about 250% in 12 months, right before the Great Recession, and peak travel fell like a rock. The minor bumps and dips Since the great recession appear to be related to the unemployment rate, including the slight uptick since late in 2011. Re-urbanization will reduce peak travel, but urban planners will have to solve real-estate scarcity and excessive commercial risk caused by scarcity. It is unlikely that Gen Y will behave any differently than their parents, unless plummeting marriage rates send people back into the cities again. Even then, urban areas are fighting an uphill battle against scarcity and sprawl.
          mylexicon
          • 1 Year Ago
          @Vlad
          Sorry, forgot to explain what it all means. Essentially, the problems with urbanization, and the boom/bust cycle of the burbs is creating a homogenous living quarters. If you look at research data, urban population density is falling rather uniformly, and the size of cities has been growing. The rising population density of urban areas, experienced prior to 1900, will not return unless the scarcity issues are met head on by urban planners. ATM, cities are more interested in sprawling and annexing new areas.
      HVH20
      • 1 Year Ago
      Gas is expensive, electricity isnt, so I don't see the automobile dying off as much as getting a heart transplant.
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