New IHS Automotive/Groupe Futuribles study says sharp reduction in motor vehicle use by 2035 will trim sales by 30 million units annually while providing opportunities for new transportation models
SOUTHFIELD, Mich. (6th March 2015) – Trends in urban motorization could reduce the number of motor vehicles in use globally in 2035 by 250 million and trim new sales by 30 million units annually. This will be most pronounced in developing countries where the auto industry is counting on growth, however, the impact will be felt in all markets, according to a new study on urban mobility from IHS Automotive and Groupe Futuribles.
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 percent will be living in cities, resulting in population densities far greater than they are today.
“It’s all about the cities,” said IHS Automotive researcher Philip Gott, Project Manager of the study, “The Impact of New Urban Mobility on Automotive Markets and Industry.” “Tomorrow’s cities just cannot fit the same number of cars per person as do the mature-market cities of today.”
The study notes that 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 car motorization enjoyed in the West, nor meet sales and production growth levels currently forecast by the auto industry.
For example, Beijing, 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 center. However, Beijing has already registered 5.4 million vehicles and an increase of 10 percent 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. Furthermore, 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, and integrate mechanized, autonomous or self-driving cars and commercial vehicles as well as virtual mobility into evolving urban lifestyles. In addition, new forms of urban-specific passenger cars and light trucks are expected to evolve.
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 Gott, study project leader, will be in Melbourne, as a key note speaker at the “Cars of Tomorrow” conference on Wednesday 12th March, next week.