Is the Auto Industry and Car Culture Dying?

That’s the opinion of more than a few these days. With millennials and younger generations more interested in technology than transportation, the future of the industry and the very shape of cars is ripe for reinvention. Throw autonomous driving cars into the mix and you have either a utopian or nightmare scenario depending on your view point. That scenario has been described a lot lately, but no more thought provokingly than by Zack Kanter:

>Most people – experts included – seem to think that the transition to driverless vehicles will come slowly over the coming few decades, and that large hurdles exist for widespread adoption. I believe that this is significant underestimation. Autonomous cars will be commonplace by 2025 and have a near monopoly by 2030, and the sweeping change they bring will eclipse every other innovation our society has experienced.

What could this mean for MINI? For the automotive industry? The car culture so many of us identify with love?

Massive change would be one scenario. Imagine a future (as Mr. Kanter does) where the vast majority of car ownership is through car sharing programs and companies like Uber. Further imagine the vast majority of those cars being 100% autonomous. The theoretical benefits are shocking:

>A Columbia University study suggested that with a fleet of just 9,000 autonomous cars, Uber could replace every taxi cab in New York City – passengers would wait an average of 36 seconds for a ride that costs about $0.50 per mile. Such convenience and low cost will make car ownership inconceivable, and autonomous, on-demand taxis – the ‘transportation cloud’ – will quickly become dominant form of transportation – displacing far more than just car ownership, it will take the majority of users away from public transportation as well. With their $41 billion valuation, replacing all 171,000 taxis in the United States is well within the realm of feasibility – at a cost of $25,000 per car, the rollout would cost a mere $4.3 billion.

>The effects of the autonomous car movement will be staggering. PricewaterhouseCoopers predicts that the number of vehicles on the road will be reduced by 99%, estimating that the fleet will fall from 245 million to just 2.4 million vehicles.

>Disruptive innovation does not take kindly to entrenched competitors – like Blockbuster, Barnes and Noble, Polaroid, and dozens more like them, it is unlikely that major automakers like General Motors, Ford, and Toyota will survive the leap. They are geared to produce millions of cars in dozens of different varieties to cater to individual taste and have far too much overhead to sustain such a dramatic decrease in sales. I think that most will be bankrupt by 2030, while startup automakers like Tesla will thrive on a smaller number of fleet sales to operators like Uber by offering standardized models with fewer options.

This last bit pre-supposes that automakers such as BMW (and MINI) haven’t seen change coming for many years. BMW’s own research led them to develop autonomous cars (I was a passenger in one for a lap of Laguna Seca four years ago) and a completely new type of electric vehicle the i3. Further BMW has bought into car sharing in a big way throughout Europe and preparing an assault on the U.S. market if rumors are to be believed.

Companies that are nimble and unafraid of reinvention will survive. Those that are mired in outdated processes and products will clearly not. But what will that change truly be? Mr. Kanter is convinced it will be unyielding and much quicker than we expect:

>Morgan Stanley estimates that a 90% reduction in crashes would save nearly 30,000 lives and prevent 2.12 million injuries annually. Driverless cars do not need to park – vehicles cruising the street looking for parking spots account for an astounding 30% of city traffic, not to mention that eliminating curbside parking adds two extra lanes of capacity to many city streets. Traffic will become nonexistent, saving each U.S. commuter 38 hours every year – nearly a full work week. As parking lots and garages, car dealerships and bus stations become obsolete, tens of millions of square feet of available prime real estate will spur explosive metropolitan development.

>The environmental impact of autonomous cars has the potential to reverse the trend of global warming and drastically reduce our dependence on fossil fuels. Passenger cars, SUVs, pickup trucks and minivans account for 17.6% of greenhouse gas emissions – a 90% reduction of vehicles in operation would reduce our overall emissions by 15.9%. As most autonomous cars are likely to be electric, we would virtually eliminate the 134 billion of gasoline used each year in the US alone. And while recycling 242 million vehicles will certainly require substantial resources, the surplus of raw materials will decrease the need for mining.

The dream is huge and frankly fascinating but for one problem. I like to drive. I bet you do as well. And while a world full of autonomous cars could be a dream for driving enthusiasts (computers driving cars are likely safer for the rest of us than many drivers), it’s the car culture that many of us love that could slowly fade into obscurity.

Is it worth it for a potentially positive fundamental change to our society?

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