Has the automotive industry really peaked?
Ever since the 1950s, cars have stood as a symbol of our personal freedom, our ability to move anywhere at any time. And for decades, the automotive industry has introduced a myriad model, selling more and more vehicles, and enjoying ever growing returns, but some experts posit that this trend may have reached its peak, dubbing it the “Peak Car” Theory.
According to various different surveys, sales of private vehicles have plateaued in the United States (as of 2004) and in the United Kingdom (as of 2008). In Australia, France, Germany, Japan and Sweden, the automotive market began shrinking even before the economic crisis in 2007. And while the market is still flourishing in China and India, the trend is changing, especially in major cities. In China, for example, public authorities are heavily incentivising public transport and restricting private car ownership in the country’s richest areas to ease urban congestion and pollution. Indeed, a recent study by IHS Automotive indicates that the automotive market will reach a peak of ca. 100 million sold vehicles during this decade and then begin an inexorable decline.
One of the main causes of this trend is urbanisation. By the next decade, one billion individuals are expected to move to cities around the globe. Considering that traffic congestion already is a key issue in many cities, the outlook does not bid well. In fact, many cities have already begun tackling this issue. In London, traffic decreased by 28% between 1994 and 2003, and when the “congestion charge” was introduced, in 2004, there was a further 12% decrease. In Paris and New York, less than half of the residents own a car. Moreover, the introduction of car sharing services, private transportation networks, as well as the improvement of public transportation services, is steadily undermining the desirability of owning a private vehicle.
On top of all of this, research after research point out that millennials are coming of age with a completely new weltanschaung. Private possessions are on the decline as what has been referred to as the “sharing economy” rises. Not only do many millennials not even have a driving license, but cars are increasingly viewed as an expensive burden that can be hired if necessary. Even shopping is largely an on-line affair and is delivered directly to the home. In fact, on-line transactions have nearly tripled in the last decade in the United States and are growing at double digits in many European countries. Similarly, broadband Internet allows more and more people to work from their homes. Telecommuters have increased from 3.3% to 4.4% since 2000 in the United States and by 13% between 2007 and 2012 in the UK (The Guardian).
Last but certainly not least, we are on the verge of witnessing a world of self-driving vehicles promising immediate, cheap and safe rides to any destination, while we work, read or simply kick back and let the driverless vehicles deliver us to our destination. The self-driving car market is expected to grow to over $87 billion by 2030 (Lux Research), completely revolutionising transport as we know it.
So, while it is certain is that we are on the cusp of a vast transport revolution, have we really reached a global peak in automotive production? Or is it really just the consequence of the prolonged worldwide economic crisis? Perhaps, in just over a decade or so, owning a car may well become a luxury hobby like owning a yacht, a plane or a horse. However, the progress of technology has proved over and over again to be a highly volatile field. Any day, a new scientific or technological breakthrough could completely revolutionise our expectations of the future – and the very way in which we move around our cities.
For further information:
- A World of Robo-Taxis
- Neighbourhoods of Tomorrow