"Peak Car" threshold signals changes from automobile to auto mobility


SOUTHFIELD, Mich. — The world that Henry Ford put on wheels is poised to stall.

Several auto-industry analysts predict "Peak Car," a point at which annual global sales growth will top out, in the next decade, Researcher IHS Automotive, for one, sees annual sales cresting at 100 million within that time.

Pollution and gridlock are putting a damper on driving in the globe's growing megacities. More young Americans are opting for public transport, bikes and vehicle-sharing. Cars on the road are lasting longer than ever. In India, some commuters leave their cars at home to avoid traffic snarls and long prowls for parking.



Driving this upheaval is a rapidly emerging reality: The vehicle that ushered in an unparalleled era of personal mobility in the last century is, in many cases, no longer the most convenient conveyance, particularly as more of the world's population migrates to big cities.

Infographic: Why car sales may be peaking globally

No one is predicting that car sales will suddenly fall off or that today's car companies are now dinosaurs. What experts do see is a reckoning for car companies, which may have to adapt to a world with less car-buying and more car-sharing, more cars that drive themselves and fewer hot rodders on the highway.

"The key question is: Do you sell cars or do you sell mobility?" said Tim Ryan, New York-based vice chairman of markets and strategy for consultant PricewaterhouseCoopers. "If you ignore these megatrends, you run the risk of becoming irrelevant."


At the same time, China is struggling with urban gridlock and growing pollution that has created a brown haze over big cities such as Shanghai and Beijing. The pollution problem spurred the country's leaders to put restrictions on car licensing to slow auto sales.

Many automakers are preparing for changing markets with cars that can be shared, or speak to one another in a bid to keep traffic from jamming. General Motors' EN-V autonomous two-seater, a vehicle engineered jointly with Segway that can detect and avoid obstacles, is being tested in Tianjin, China.

"We have looked at the urbanization trend very closely," said Jim Cain, a spokesman for Detroit-based GM. "It's driven experiments like our EN-V program in China and our involvement in services like car sharing."





In the U.S., 44 percent of people would prefer to live in a city with automated "driverless" cars that would reduce congestion, according to a new survey from Intel. Already in the U.S., where automotive ownership has long seemed a birthright, almost one in 10 households don't have a car, up 5.7 percent over the last five years.




In Germany, which remains Europe's top auto market more than two decades after sales peaked there, Daimler and Bayerische Motoren Werke have tried to woo non-owners with programs that let people rent cars by the minute. This month, Daimler started letting some users of its Car2Go service pick up a Mercedes-Benz B-Class hatchback in Berlin and drop it off in Hamburg, or the reverse.



"I didn't really feel the need to have a car," Ortiz said. "A car was just a waste of money."


For the world's automakers and suppliers, that means making cars won't be enough anymore, Ryan said. They have to transform into transportation-service providers that cater to consumers who don't want the hassle and expense of owning a car and instead just want to rent one that comes when summoned, he said.


At the Tokyo auto show last year, Toyota unveiled concepts for three-wheeled vehicles that communicate with each other in dense urban settings. GM and Ford are part of a U.S. program testing the ability of 3,000 vehicles to communicate among themselves and with objects such as traffic lights and roadside sensors.


"We're going to have these megacities and they are going to have lots of infrastructure issues, not just transportation, but clean water and food distribution," Ford said in a July 2011 interview, outlining issues the Dearborn, Mich.-based company said this month it's continuing to examine. "If you look at every auto company's business plan and extrapolate it out over the next 10 years, it certainly didn't take me long to start asking the question: Where will all those cars and trucks go?"






Kavita Bhatt, 31, takes a taxi to work in Mumbai because it's easier and cheaper than crawling through traffic at 3 mph in her car.

"Commuting is a pain any way you look at it," said Bhatt, an executive at a research company. "I drive to work once in a while, but it's impossible to find parking."



"If the resources are there, people cherish mobility — we can't underestimate the importance of that," Polzin said. "A car is 60 percent mobility and 40 percent ego."


"When your economic means hit a certain level, it makes sense," said Ding, 28, who currently commutes an hour each way to her job as a project supervisor for a commercial developer. Driving to work will cut her commute time in half, she said.

Ding, who is researching Volkswagen models online, said she may have trouble finding parking near her apartment. "I'll make sure I find a way," she said.





Tanya Loh, 35, who works at an e-commerce startup, ditched her 2006 Volkswagen Jetta TDI diesel a year ago after she realized San Francisco had more convenient transportation options.


Loh's "wheels" now: a Dutch bicycle and a used Vespa motor scooter. She has a pass for the San Francisco transit system. She also uses smartphone applications from Uber, Lyft and Flywheel Software to summon private cars for hire and taxis, as well as the City CarShare service. Loh says she has havled her monthly transportation costs.





"It's really pretty hard to go to somebody and say 'Can you imagine a day will come when you won't need a car?' " said Phil Gott, senior director of long-range planning at IHS in Lexington, Mass. "Because the obvious answer is 'What, are you nuts? I'll always need a car.' But in fact, people are moving into the cities and doing with fewer cars and in some cases with no cars."



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