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Car Apocalypse
Articles written before 2019


  • (september 2018)

    Car Apocalypse .
    It is commonplace to predict the demise of the personal car, probably the single most popular icon of the 20th century. But many articles, when discussing trends, confuse car sales and car ownership. A Bloomberg titled "Private car ownership declined globally" is typical: that article is about declining car sales, not declining car ownership. Car sales cannot increase that much in countries such as the USA where car ownership is almost 80% (including toddlers, convicts, centenarians, etc). There were 276.1 million registered vehicles in the USA in 2018 (source: Hedges & Co). How many more new cars can we possibly have?

    However, each new car sold is either a replacement car or it adds a new car owner, and 17 million new cars are still being sold every year in the USA. Also note that statistics don't count the sale of used cars. When you buy a replacement car, you don't normally junk your old car: you sell it to someone else.

    Car ownership is increasing all over the world.

    Last year's global drop in car sales (NOT car ownership) is almost entirely due to China, where the situation is simple: 1. All the Chinese who could afford it already bought a car and the ones who cannot afford it are saving for a car; 2. The government has officially backed electric cars, but there aren't enough electric cars to buy. No Chinese in his/her own mind would buy a gasoline-powered car when the government spoke against it. Sales of Chinese electric vehicles more than doubled at the same time that overall sales declined.

    The real trends of 2018 are different. First of all, not only is car ownership increasing, but the size of the car is increasing even more rapidly. The SUV was social stigma a few years ago. Now it's default even for singles who don't have to take children to school. Quote from Statista: "The number of cars sold in the U.S. went down from a staggering 7.9 million units in 2014 to a little over 5.3 million units in 2018, mainly because U.S. consumer demand shifted towards larger vehicles over the course of these four years". That's the real news: big cars are rapidly replacing compact cars. Younger generations talk the right talk about a "carbon-free" society, but they don't walk the right walk: the moment they have money (or just credit) they buy an SUV, even if they are not married and have no children. Secondly, in 2017-18 a deluge of studies has changed attitudes towards ride-sharing services because they showed how detrimental ride-sharing services such as Uber and Lyft are for traffic congestion and the environment (for example Schaller Consulting, San Francisco, Mapc, UC Davis). Add these studies to the fact that ride-sharing services are losing money everywhere. If they increase rates, it will make their services less affordable. Their future is debatable.

    But the most telling story about cars comes from China. China has developed a fantastic infrastructure of high-speed trains and subways, on top of a vast network of bus routes. Last but not least, it has moved 70% of its population to cities. There is no need for a car in Chinese cities. And, yet, everybody wants to buy one. Owning a car is becoming as important for a man as owning a house for the purpose of getting married: women expect their fiance to own a car. The appeal of owning a car seems to be universal, from Africa to India. I was in a small Caribbean island where it was literally faster to walk than to drive during rush hours. Every city of the world is experiencing the same problem: traffic congestion.

    The world needs creative ideas for public transportation. Ride-sharing only creates another problem: it puts more cars on the road. Self-driving cars don't exist and won't exist for a long time and, if they ever exist, they too will create another problem. It's due to lack of imagination (and maybe political will) that we keep thinking of alternatives to car ownership that still involve a car. In the short term, invest your money in parking garages, especially in China.

    TM, ®, Copyright © 2019 Piero Scaruffi All rights reserved.
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