A cyclist navigates between street traffic and pedestrians in a special bike lane on Dearborn Street in Chicago's Loop. (Charles Rex Arbogast / AP)
The world that Henry Ford put on wheels is poised for a stall.
In the globe’s growing megacities, pollution and gridlock are putting a damper on driving. In India, some commuters are leaving their cars at home to avoid traffic snarls and long prowls for parking.
More young Americans are forgoing the dream of auto ownership for public transport, bikes and vehicle-sharing. Cars on the road are lasting longer than ever.
All of that may herald a new era for an auto industry weaned on a century of global growth. The world will reach “peak car” — a point at which annual global sales growth will top out — in the next decade, several auto-industry analysts predict. Researcher IHS Automotive, for one, sees annual sales cresting at 100 million within that time.
Peak car is at odds with the ambitious expansion plans of global automakers, which IHS says 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.
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.
No one is predicting that car sales will suddenly fall off or that today’s car companies are now dinosaurs. What the 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, vice chairman of markets and strategy for consultant PricewaterhouseCoopers LLP. “If you ignore these megatrends, you run the risk of becoming irrelevant.”
Many automakers are preparing for changing markets with cars that can be shared, or speak to each other in a bid to keep traffic from jamming.
General Motors Co.’s EN-V autonomous two-seater, a vehicle engineered jointly with Segway Inc. 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.”
The case for growing gridlock has been presented by PricewaterhouseCoopers, among others. Today, half the world lives in urban areas. Over the next decade, there will be a 25 percent to 50 percent increase in urban dwelling, as about 1 billion people move into cities, according to PwC.
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 PwC’s 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 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 Corp.
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.
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 that get them to the office safely and quickly, said Thilo Koslowski, auto analyst for researcher Gartner Inc. of Stamford, Conn.
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.
Many are laying the groundwork. 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.