Study suggest a dramatic fall in future car sales
Trends in urban motorisation could reduce the number of motor vehicles in use globally in 2035 by 250 million and trim new sales by up to 30 million units annually, according to a new study on urban mobility from IHS Automotive and Groupe Futuribles.
The study predicts that the trend will be most pronounced in developing countries where the auto industry is counting on growth, however, the impact will be felt in all markets. And the reason? Population growth and regulations that curb traffic congestion to ensure economic vitality and reduce pollution. The study notes that more than half the world’s population is now living in urban areas and by 2035, more than 60% will be living in cities, resulting in population densities far greater than they are today.
According to Philip Gott, IHS Automotive’s project manager of the study, entitled The Impact of New Urban Mobility on Automotive Markets, it’s all about the cities.
“Tomorrow’s cities just cannot fit the same number of cars per person as do the mature-market cities of today. The population density of Asian cities is several times that of European and American cities and that urban Asian is already heavily congested with two-wheeled vehicles.
“As a result, Asian and other developing market cities will not achieve the levels of vehicle motorisation enjoyed in the West, nor meet sales and production growth levels currently forecast by the auto industry.”
Beijing, for example, with about 130 cars per thousand people in its urban zone, has set an absolute cap of six million vehicles of all types that it will allow to be registered in the city centre. The city has already registered 5.4 million vehicles and an increase of 10% at most would still leave them far short of the 400 to 500 cars per thousand people ratio seen in Europe and the United States.
The study notes there is already sufficient global production capacity to meet anticipated demand, though the plants may be sited currently in the wrong locations, and warns that over-capacity and low factory utilization is likely unless automakers grasp the implications of the new urban mobility constraints.
“The lack of net global organic sales expansion will make funding of new plants in growth markets more difficult.
“Long-term revenue growth for the industry depends on successful conquest sales and new business models which engage car-as-a–service (car sharing), not just car-as-a-product.”
Among the expected changes to the driving landscape is the leap in autonomous car technology leading to self-driving cars that will eventually reverse the congestion-induced negative impact because they will lower accident frequency, be programmed for more efficient fuel consumption, provide the occupants time for unfettered communication and result in more efficient traffic flow, the study says.
Phil will be in Melbourne as a keynote speaker at the Cars of Tomorrow conference on Wednesday 12th March. More info @ www.ihs.com
Philip Gott is a director of IHS Automotive and brings more than 35 years of automotive industry experience to his role in assessing forward-looking technical, business, regulatory and societal trends to improve company performance. He is a much sought after consultant and public speaker on market challenges and new technologies. Phil has helped automobile and truck manufacturers and many global suppliers to achieve targeted business results by identifying competitive advantages of advance vehicle technologies, along with creating and implementing technical, business or market-entry strategies that increased revenues and gained market share. He also has provided broad, long-term strategies when assisting NGOs and government agencies, such as The European Commission, NASA, the US Department of Energy and Environmental Protection Agency. A member of the Society of Automotive Engineers since 1975, Phil authored a successful book, “Changing Gears: The Development of the Automotive Transmission,” as part of the SAE Historical Series. A Bachelor of Science in Mechanical Engineering, he is a graduate of Lafayette College, Easton, Pa, US, where he was inducted into Pi Tau Sigma, the honorary engineering society.