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.
By Jon LeSage