The Secret Fear Of The World's Biggest Auto Companies

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The Secret Fear Of The World's Biggest Auto Companies

"The glitz and glamor of the year’s first big auto show is still reverberating around the industry, and with the American economy picking up, optimism is the order of the day in Detroit.

But behind the scenes, there are some real worries around the world about just how strong the auto market will be. This weekend, Jalopnik.com, the auto enthusiast Web site, raised a question that many companies have been asking themselves:

What if the auto market is at Peak Car? Translated, that means, what if the biggest car countries of the world have maxed out on consumer demand for automobiles?

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[IMG]http://specials-images.forbes.com/image ... und=000000[/IMG]
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British princesses Beatrice and Eugenie pose next to a Union Jack-bedecked Mini, which is built in England, but owned by BMW of Germany. Britain is promoting its culture in Germany, at a time when carmakers across Europe are deeply concerned about a slumping market.

Jalopnik based that question on a story last week from Quartz, the business site run by The Atlantic Monthly. It suggested that the world is basically on the verge of global gridlock. It suggested the world’s auto companies are facing a future in which they become “enablers of mobility,” helping nations develop systems to move people around, rather than sell them individual conveyances.

Purists, like those who read Jalopnik, scoff at that idea, saying there will always be demand for vehicles that set their owners blood on fire. But it’s a question that many people who study transportation have been pondering for some time now. I first took a look at the topic in 2009 for The New York Times, when I wrote,

“For generations, American car buying has been guided by one grand philosophy: which one do I want? But now, another question has begun to percolate: do I need a car at all?”

In recent years, I’ve only become more convinced that the job for the world’s biggest auto companies will simply get harder. All around the United States and Canada, people are thinking seriously about giving up their automobiles. Of course, this is impossible to do if you’re a farmer in the Great Plains or a contractor in Texas, where you simply have to be able to load up a pickup.

But in American and Canadian cities, the emphasis is much less on building new roads, and much more on building bike paths. Ann Arbor, Michigan, where I live, has put on a strong push the past year or so to protect pedestrians. The campus at Stanford University in Palo Alto seems to have almost more bicycles than students.

People are clamoring to use public transportation in places from Chicago to Los Angeles, where downtown residents just voted to bring back streetcars. Bike rentals abound everywhere from Boston to Chattanooga. And everywhere, people want to live places where they can walk, whether to work or just go for a stroll in the evening.

Meanwhile, more women than men are now buying automobiles, and their choices are sharply different from those that male buyers make, as I reported for Forbes last year.

These social trends may be just as significant for the automobile industry as the original shift to horseless carriages a century ago. Back then, people felt hampered by their lack of mobility and itched to get out of cities into leafy green suburbs, where they’d have room to breathe.

Now, young consumers — and even middle-aged and older ones — are rethinking the lifestyle that has them go from inside a house to inside a car. The possibility of Peak Car is seismic, and it portends change not just for Detroit, but for automakers in Europe, China, Japan, Brazil and elsewhere.

Quartz, in its story last week, isn’t predicting the end of the automobile. But it believes automobile companies will have to integrate themselves into a transportation system for a high-population, low-emission future.

I think the challenge is even more significant. Auto companies, who are used to playing on peoples’ emotions and sense of independence, now have to find new ways for consumers to consider making them part of their lives.

In the past, they had to build a case for choosing their vehicle over someone else’s. Now, they have to build a case for owning a car at all. And their secret fear is that they may not be able to do so."

Em: http://www.forbes.com/sites/michelinema ... companies/