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Have we reached Peak Car?

Have we reached Peak Car? thumbnail

General Motors has announced it’s shuttering five production facilities and killing six vehicle platforms by the end of 2019 as it reallocates resources towards self-driving technologies and electric vehicles.

The announcements should come as a surprise to no one, as they echo a similar announcement made by Ford earlier this year that it will exit all car production other than Mustang within two years.

Why the sudden attitude adjustment toward cars? Well, both firms cite a focus on trucks, SUVs and crossovers. OK, sure—that’s what more people are buying when they buy a today. But there is a broader and more long-term element to this discussion.

Have we reached Peak Car?

Many may remember the dialogue associated with Peak Oil, or the idea that we had reached or would soon reach the peak production levels of oil around the globe.

Such forecasts and predictions were likely related to price run-ups on commodity and investment strategies in the oil industry. However, new exploration discoveries and extraction technologies ultimately mean we are a long way from running out of oil. While we may still hit peak production in the near future, it is more likely due to a decreasing need as society moves to alternative energy sources.

But what about cars? North American hit 17.5 million vehicles in 2016, and dropped marginally to 17.2 million in 2017. Interesting, but perhaps not significant.

More telling are changes in driver behaviour. In North America, for example, fewer teens are getting driver’s licences. In 1983, 92 per cent of teens were licensed, while by 2014, that number had dropped to 77 per cent. In Germany, the number of new licences issued to drivers aged 17 to 25 has dropped by 300,000 over the last 10 years.

The future is driverless

Factor in ride-sharing services like Uber and Lyft, the comprehensive cost of vehicle ownership and more effective public transportation (everywhere but Canada) and we get a sense of some of the reasons for these evolving automotive strategies.

Most significant, however, is the evolution of self-driving technology. Picture this scenario:

Julie is an ER doctor at the local hospital, on the 7 a.m. to 3 p.m. shift. She jumps in the at 6:30 a.m. and is at the hospital by 6:50 a.m.

After dropping Julie off, the car then heads home, arriving in time to take Julie’s two children to their ; one of them tosses their hockey equipment in the back of the car. The car then returns home to take Julie’s husband to the law office where he starts work at 9 a.m.

The car then swings by the school to take Julie’s daughter to hockey practice at 2:30 p.m., and then returns to the hospital to pick Julie up. And so on.

The technology to support the scenario above exists now, and will result in reduced car ownership through a more economical and efficient approach to managing cars, whether accessed through independent household ownership or fleet membership.

As it is today, a family like Julie’s would need two or possibly three vehicles, and those vehicles would largely sit still most of the day. Tomorrow, the family could be down to one vehicle, possibly an SUV for the hockey gear. What happens when families or groups of people further pool their assets for more ride-sharing or increased capacity?

Fewer cars on the road within a decade

We are moving from a do-it-yourself (DIY) transportation economy to a sharing or do-it-for-me (DIFM) economy. Many of us won’t like it—I honestly like to drive—but the numbers and the technology are there.

As safety technologies improve and societal paradigms shift, this evolution will gather momentum. Based on the young driver statistics above, it seems reasonable to anticipate a reduction in cars per capita of 20 to 30 per cent in the next decade.

Unions at GM and Ford are justifiably unhappy, but they shouldn’t be surprised. It is quite possible that we have reached Peak Car in North America and Europe.

Companies that want to succeed in this new environment will need to be different, and especially better in some way. If car volumes drop by 30 per cent over the next 10 years, there better be something special about the car company that hopes to survive, let alone prosper —like better technology, better comfort or better service.

If current trends continue, we can anticipate more shutdown announcements—like GM’s—from car companies and parts suppliers, as there won’t be room for all of them.

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9 Comments on "Have we reached Peak Car?"

  1. Sissyfuss on Tue, 25th Dec 2018 9:54 am 

    I was in the auto manufacturering business for awhile and the corporate philosophy was that autos were an afterthought because the profit was in SUVs and Pick-ups. Plus the Asian auto manufacturers were killing them in quality and price for years. They’re gambling that the oil price will stay low enough to make their gas hogs desirable. Extreme short term thinking that may flatten their tires down the road.

  2. realist on Tue, 25th Dec 2018 11:36 am 

    I suggest the writer of this article buy a self driving car and give us an update in 6 months if they are still alive

  3. No Techo-Future on Tue, 25th Dec 2018 3:53 pm 

    Right on ‘realist’; this article is pure Star Trek. A more likely future is one of increasing restrictions on private auto use to prioritize system critical processes like freight, mining, and agriculture to buy a bit more time before collapse.

  4. Anonymouse on Wed, 26th Dec 2018 12:36 am 

    Uber, ulift? Seriously? Where does this dumbass think the cars ubers pay-per-ride self-contractors drive come from? Does this idiot think those people created their own cars on their 3d printers at home? ‘uber’ is another bubble scam dressed up in ‘tech’ clothes, and has nothing to do with…anything.

    The ‘future’ will indeed be, driverless’, unless you are, rich, in the military, gov, or provide critical services in some capacity. Everyone else will be walking, biking, or maybe they be employed busting up all the old parkades, ‘freeways’ and expressways to reclaim it for farmland, or raw-materials.

    They sure as fook wont be sitting in their driverless hovercars studying their torahs for pearls of wisdom while it whisks them to the spaceport. Right cloggraham?

  5. forbin on Wed, 26th Dec 2018 3:00 am 

    “…. from a do-it-yourself (DIY) transportation economy to a sharing or do-it-for-me (DIFM) economy…..”

    or as us old people remember it – rent or hire

    and the world progressed to the ownership model as that was cheaper overall .

    now we are going back to rent model ?

    isn’t this really what collapse looks like ?

    Transport As A Service ( TAAS ) , frankly does Uber work out side of New York or London?

    Doesn’t work around here , its still cheaper to own my car , thanks, and no I’ll not be an Uber driver – the money they pay doesn’t cover the costs ( look it up ) .


  6. Dooma on Wed, 26th Dec 2018 4:35 am 

    When you look at the obesity epidemic affecting the western world, combine it with our love affair with ‘stuff’ it comes as no surprise that we are buying bigger vehicles.

    We really should be going the other way. But our waistlines won’t allow us to. We like SUV’s because they give us a commanding view of the road. Until you are looking at the back of another SUV.

    We no longer have an automotive industry in Australia because they only made sedans.

    Not a single mention of public transport in this article. Just clinging to BAU. I feel like a Luddite, but I genuinely believe that driverless cars are pie in the sky.

    We need to change the way we think about mass transportation completely. Just as we do with many facets of our lavish lifestyle.

  7. realist on Wed, 26th Dec 2018 4:43 am 

    Global vehicle sales.

    As yet there is no sign of peak ownership.

  8. Cloggie on Wed, 26th Dec 2018 11:30 am 

    Completely subscribe to the views as expressed in this article.

    Car driving, especially in over-crowded Western Europe, stopped being fun a long time ago

    (First Dutch traffic jam in 1955, great fun at the time, because if you were in it, you were soooo modern!)

    It is true that everybody wants to (1) own a Ferrari and (2) drive with it on roads passing through empty, spectacular landscapes.

    But since neither (1) nor (2) are true, car driving has become like paying taxes: one of the inevitabilities of life, you will only be relieved off after death.

    If average people have the possibility of being relieved of the huge burden of private car ownership and nevertheless can have similar door-to-door mobility at a fraction of the cost (via autonomous shared car driving), they will do that, especially if they are young.

  9. SWSarah on Wed, 26th Dec 2018 7:08 pm 

    This is serious business “hopium”. I feel confident that 100 years from now will look a lot more like 1915 than 2315. That said if it makes the author feel better I suppose “make it so.”

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