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It has been said that the next five years will see more changes in the motor business than at any time since the car was invented.
I am not sure that I agree with that time-scale but there are certainly major shifts in design and engineering, public policy, and consumer attitudes that will alter the cars we drive and the way in which they are made and sold.
It is also a time of change for me, as this is my last column for Motor Trader. I have been writing Hutton Reports, or its equivalent, for more than 30 years, reporting and commenting on cars and motor manufacturers and focusing on what dealers need to know about developments in the industry.
If the past is any indicator of the future, there will not be a revolutionary change by 2023. Back in 1992, I wrote: “Everybody wants to climb on the electric bandwagon” and “manufacturers are confident that the price of an EV can match that of a petrol or diesel car – without the batteries”.
From the 1998 Detroit Auto Show, I reported: “The next big thing is crossovers between MPVs and 4X4s”. In Europe, the Renault Scenic seemed to herald a new shape for the ordinary family car but within a few years the MPV fad was over and the SUV style replaced it.
The Nissan Qashqai started that trend in 2007 and in September this year reached the top of the UK sales chart for the first time.
In 1993, diesels accounted for 18% of the market but with official encouragement (and tax benefits) designed to reduce carbon dioxide emissions would reach a peak share of 56% in 2011. Four years later, there was ‘dieselgate’ and the sins of Volkswagen, one of diesel’s main proponents, decimated its future prospects – but the UK diesel share remains at 42%.
All of this tells us that although the motor business is continually evolving, trends and new ideas take a surprisingly long time to become established. The new wave of electric vehicles was predicted in 2008 and started to become available in 2011. The first hybrids (Toyota Prius and Honda Insight) arrived in 2000 and yet EVs and hybrids together still account for only 5% of the UK market.
I drove the first fuel cell vehicles in 1999 and heard confident predictions of mass-production by 2004. Thirteen years on, we still have only a handful of limited-production fuel cell cars, although admittedly they have been hampered by the lack of hydrogen refuelling facilities. Now everyone is working on autonomous cars but, like the fuel cell, the self-driving car is likely to be ready long before the infrastructure to support it.
Bob Lutz, former chairman of Ford of Europe, president of Chrysler and vice-chairman of General Motors, recently presented a doomsday scenario in the US journal Automotive News. He wrote: “We are approaching the end of the automotive era. Travel in the future will be in standardised vehicles, modules that will no longer be driven by humans because in 15-20 years human-driven vehicles will be legislated off the highways.
“Unfortunately this is the demise of automotive retailing as we know it. Dealerships are ultimately doomed. Auto retailing will be OK for the next 10 years as the car companies make autonomous vehicles that still carry the manufacturer’s brand. But the era of the human-driven automobile, its repair facilities, its dealerships – all will be gone in 20 years.”
Lutz reasons that the autonomous module will have no brand identity and all will have the same performance, because nobody will be passing anyone else on the highway. The vast majority will be owned and operated by fleets.
I know and admire Lutz and can accept his vision of a future transport system without cars as we know them, but I think his timing is way out. I cannot see that even – perhaps particularly –in America, it would be acceptable to make it illegal to drive and enjoy cars on existing roads. Cars last on average 15 years which means that some bought today will still be in regular use in 2037.
A study by IHS Markit, a respected research organisation, suggests that, by 2040, the number of vehicles bought for taxi or shared transport services will increase 30-fold. At that time, it predicts that 62% of cars sold will have petrol or diesel engines, mostly as part of a hybrid powertrain, and that 30% will be plug-ins.
The car market will be smaller. Electric vehicles need minimal service. The big taxi fleets will buy centrally rather than locally. And the self-driving pod, when it arrives, will have no place in the dealership as it is today.
So, should car dealers be worried about their future, and considering some other means of making a living? I come back to timing. Don’t abandon your 5- and 10-year plans. I reckon you can still have a good business in 20 years. Big changes are coming – but not that fast.
