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Auto culture may be driven to change

Analysts predict ‘Peak Car’ sales hit in next decade

China helped increase global auto sales by 46 percent since 2000, but it is also dealing with urban gridlock and pollution.
China helped increase global auto sales by 46 percent since 2000, but it is also dealing with urban gridlock and pollution.Brent Lewin/Bloomberg News

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

Several auto industry analysts are predicting ‘‘Peak Car’’ — the point at which annual global sales growth will top out — in the next decade. IHS Automotive, for one, sees 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, bicycles, and vehicle sharing. Cars are lasting longer. All of that may herald a new era.

Peak Car is at odds with the ambitious expansion plans of automakers. IHS says they are gearing up to produce more than 120 million vehicles by 2016, almost 50 percent more than last year’s worldwide sales mark of 82 million. The dynamic also threatens the business plans of parts producers, suppliers of raw material, and oil companies.


Yet 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.

No one is saying car sales will suddenly fall or that car companies are dinosaurs. But car companies may have to adapt to a world with less car buying and more car sharing, more cars that drive themselves, and fewer hot rodders.

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

There is a counterargument: Chinese consumers continue to have a voracious appetite for autos, as more of the country’s 1.3 billion people climb the economic ladder. China has helped drive global auto sales up 46 percent since 2000, and in 2009 the country surpassed the United States as the world’s largest auto market. Chinese consumers bought 22 million vehicles last year; automakers and analysts forecast 30 million by 2020.


At the same time, China is struggling with urban gridlock and growing pollution. The pollution problem spurred the country’s leaders to restrict car licensing to slow auto sales.

Many automakers are preparing for changing markets with cars that can be shared, or speak to one another 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 China.

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

In 25 years, there will be 9 billion people living in urban areas, more than the entire population of the Earth today. If they are all driving cars, gridlock could block the path of food, water, and emergency medical treatment in urban areas, said Ryan.

‘‘People won’t stand for spending 25 percent of their life commuting,’’ Ryan said. ‘‘The way they will get around will be different.’’

In the United States, 44 percent of people would prefer to live in a city with automated ‘‘driverless’’ cars that would reduce congestion, according to a survey from Intel. Already, almost one in 10 households don’t have a car, up 5.7 percent over the last five years.


In 2010, 69.5 percent of US 19-year-olds had a driver’s license, down from 87.3 percent in 1983, said Michael Sivak, at the University of Michigan Transportation Research Institute.

The shift is also being fueled by changing attitudes on oil consumption for environmental, political, and economic reasons. Alternatives to auto ownership are emerging, such as ride- sharing company Zipcar and ride-booking service Uber Technologies.

Ultimately, urban dwellers will order a ride to work on their phones, get picked up by a driverless car, and whisk through traffic controlled by satellites and sensors, said Thilo Koslowski, auto analyst for Gartner Inc.

Preparing for driverless cars and vehicles that talk to each other makes up a significant portion of the $100 billion the global auto industry spends on research and development, according to a study last month by the Center for Automotive Research, or CAR. Automakers, who guard the specifics of their R&D budgets, wouldn’t reveal to CAR exactly how much they’re spending.

Meanwhile, America’s centurylong love affair with the car is cooling. The number of households without a car grew to 9.2 percent in 2012, from 8.7 percent in 2007, said Sivak. In New York, Washington, Boston, Philadelphia, San Francisco, and Baltimore, more than 30 percent of households were carless, according to census data. In 21 of America’s 30 largest cities, carless households grew from 2007 to 2012, Sivak found.

‘‘The likelihood is pretty good that we have reached the peak per person or per household’’ in the United States, said Sivak, who has produced five studies on the topic. ‘‘We have fewer vehicles and we drive each of them less.’’