Guest writer, LILY, foresees that the car industry is coming full circle very soon, and change is imminent.
Caring for my beloved elderly mother has been an honour. This process has helped me to realise one natural law – everything comes full circle. When a person is born, he is a baby in diapers with childlike behaviour during the early years; the process of growing and ageing brings the person back to the starting point of childlike behavior during old age (although not every elderly person needs diapers). In agriculture, the trend evolved from natural fertiliser to chemical fertiliser, and now the emphasis is back to the former with a modernised term called ‘organic’.
From the first day that the car was invented, and then undergoing the development stage and reaching the peak of technology application in the car industry, would there be a day that people start to realise that cars are too disruptive, hence place less importance on it? I would define a situation when cars are found less important, leading to less car ownerships, as ‘de-motorisation’.
There might come a time that de-motorisation will happen after a long dependence on personal cars. The car industry ecology has been trying to balance itself without us realising, amidst the complications of infrastructures, environmental issues, natural resources depletion and the transformation of automakers’ business models. When there is an excess in the system, it will need to be adjusted. Take motorcycles in China as an example. The growing purchasing power in China has seen motorcycles replacing bicycles, especially in the bigger cities. The overcrowding of motorcycles on the roads has become disruptive and a threat. One of the greatest challenges between 1990 to 2000 was the increasing rate of motorcycle robberies and snatch thieves, which allowed criminals to act fast and escape fast. Subsequently, motorcycles were banned in Guangzhou, Dongguan, Zuhai, Shenzhen and Hangzhou, and with very strict restrictions in Shanghai and Beijing. This is an example of technology becoming too destructive that something else has to be done to achieve new balance in the system.
Singapore is another country with many rules and regulations on car ownership (read also Malaysian vs Singapore: Who’s Worse Off? and Forget about Owning a Car Already). We can grasp the whole idea of how de-motorisation is important to Singapore, to keep the system away from potential hazards due to over-motorisation, like physical environment destruction and geographical space constraint.
Both examples above are de-motorisation triggered by the environment of over-motorisation. From the perspective of natural behavior study, will there be a time when humans start realising that a car is not that important to them, but what they need is ‘transport’ and, therefore, they will then not desire owning a car? If that becomes a reality, efficient public transport will have to take up an important role in human mobility or something else has to present a much more favourable alternative to the public.
The Japan Automobile Manufacturers Association (JAMA) has published a market research conducted between 2008 and 2010 concerning youth interest in cars, in industrial countries – they are the future group of customers geared with purchasing power to buy cars. University students in Japan have been ‘losing interest’ in cars; in Germany, the same age group has less interest in premium car brands and, very likely, this trend will continue on. Come to the country with the current world top ranking car production – China. Its youth are interested in premium car brands but the research forecasts that the trend will wane in the future.
Creative business entrepreneurs start to bridge the gap between motorisation and de-motorisation. There are intermediaries such as rent-a-car businesses which began as a solution for visitors, by allowing customers the use of a car during short term stays or visits in foreign locations without owning one. These businesses have begun to extend their coverage into a new territory; they target not only the visitors but also residents by offering an option to not ‘de-invest’ into a car (the moment you get your car, it starts to devalue; therefore, I use the term ‘de-invest’) with just 4 simple, convenient steps, which is ‘join’, ‘reserve’, ‘unlock’ and ‘drive’.
Zipcar started their business operating in a few big US cities, to make it possible for residents to not own a car, yet be able to drive one. You do not need to carpool, but you can do car-share now. Zipcar leverages on RFID technology in a little card to enable members to book their chosen cars for as many hours as they wish. The chosen car is unlocked with the card and when time is up, the driver just needs to park the car back in its original, designated parking spot. Members can choose from a variety of more than 30 brands, including BMW, Audi, Mini and more. It is a worry-free experience as members can opt for insurance coverage. The car is embedded with a ‘kill’ function to prevent theft as well.
Car sharing is not a new concept. In fact, it started as early as 1960s in Amsterdam, based on a similar operating system with a much more backward technology. Switzerland launched a slightly more modern car sharing programme in 1987, Germany in 1988 and followed by Quebec, Canada. However, the first successful enterprise was in Portland, US back in 1998.
Susan Shaheen from the University of California, Berkeley indicated that in July 2012, there were 26 car sharing programmes in the US with 806 332 members sharing 12,634 vehicles. In Canada, there were 19 car sharing companies which involved 101,502 members with 3,143 vehicles. In October 2012, there were 27 countries in the world having such car sharing operations, which involved approximately 1,788,000 members with 43,550 cars, excluding some projects still in the planning stages.
Let’s take the US statistics for our analysis: 806 332 members using 12,634 cars, which equals to 63 drivers to 1 car. Essentially, this means that we do not require 806,332 units of car, and that saves so much natural resources and reduces disposal problems. Assuming that 1 car releases 7,000kg of carbon monoxide a year, which contributes to global warming, and that each driver would use the car to its fullest capacity, we would have eliminated 5,555,886,000kg of carbon monoxide in a year by having only 12 634 units of car instead of 806,332! Will this situation reduce the revenue and profits of car companies? To me, it may change the structure and source of their income, but it may not reduce their profit. Car companies will then focus more on aftermarket services because the cars need to be properly maintained due to extensive usage. The countries will not experience reduction of GDP as well because the manufacturing output will surely be replaced by the output from the car sharing industries as well as more activities in the auto aftermarket industry.
The same concept of car sharing existed then and now, but technology has made a positive difference in such programmes, including the speed of news diffusion on its benefits and availability. Perhaps soon, more cities will adopt this concept and embark on the way to de-motorisation.
William Clay Ford Jr, the Chairperson of Ford Motor Company Ltd, said it right: “If you live in a city, you don’t need a car…The ‘car of the future’ will be shared.”