The Analyst View: Driving
into the future
The automotive sector is in a state of flux, with the wind of change blowing from many directions – social, political, environmental, technical. We’ve covered many of the short and medium-term implications, but here are a few less obvious long-term trends that could affect the way we transport ourselves in the future.
Resetting the mix
Until recently, industry commentators were almost united in seeing a short and dark future for the car as personal transport. The scenario they envisaged saw a major shift from personal transport to mass transit. Ever-increasing urbanization and centralization meant that we would all be making use of a dense web of multi-modal transport solutions involving trains, buses, metro networks, cycles, walking, ridesharing services, river boats and so on.
The car would be squeezed out to the margins as a taxi vehicle or an occasional rental for trips to the country or to move bulky items. Fewer people would learn to drive, as autonomous vehicles became ubiquitous, and the personal vehicle would go the way of the dinosaurs. It’s funny how things turn out.
Since Covid-19, shared transport has become unpopular and even officially discouraged. Employees and employers have discovered that working from home is not only possible but, in many cases, desirable. And if you’re meeting via video and communicating via email, text, WhatsApp, Slack, Teams and the rest, then why pay
expensive property prices to live near a no-longer-used office? Why not ditch the commute?
Some companies have already stated that they’re not going back. This is now the new normal. However, the new geographically spread out, commute-free workforce has different transport needs to the office-bound city commuter. In their small towns and countryside cottages they need to get to local shops, schools and other destinations not served by mass transit. In short, they need… cars. Who would have thought it?
Mobility as a service
Ownership seems to be out of fashion in all sorts of areas – the subscription model is thriving from fitness to furniture, personal hygiene to pet supplies, washer-dryers to wine. Car ownership is no different. Owning and running your own car can feel like an expensive, inconvenient hassle.
There are car clubs which appeal to people who can’t afford to own a car outright, or don’t want to, such as younger drivers or those who live in big cities and don’t often need a car.
Leasing has proved very popular among both individuals and companies too – in 2019 alone, the global company car leasing market grew 3.9% to hit 7.9 million units – and seems to have a ready market among those who want an all-in-one solution to servicing, tax, insurance, warranties and the other nuisances of car ownership. Plus users can often drive a newer, nicer car than they would be able to afford outright.
A recent study from Transparency Market Research forecast that the global leasing market will grow at about 9% from 2020 to 2030. It’s big business, and getting bigger.
But leasing still entails ‘owning’ one car for a set period. A subscription
model can be far more flexible. Manufacturers such as Audi, Mercedes-Benz and Cadillac have been trialing a membership model in which you can choose a vehicle, then change it for a different type if your needs change. In some examples, you can, say, have an SUV for winter then a convertible for a summer holiday. And if you travel to a different city you can pick up a car of the same make to drive, as though it were a rental, all through your membership.
Is it the future? Some version of it may well be. Nobody actually wants to pay for all those extras, surely?
Robots? Flying cars? Jetpacks?
Autonomous cars have been on their way for many years now. So where are they? Why isn’t your car taking you to the supermarket while you snooze, read or watch a movie?
The answer is that reality is a more complicated place than you’d think. It turns out (despite some evidence to the contrary) that humans are actually very good at decoding a complex set of inputs and translating that into steering, braking, signaling and all the other elements of driving. Autonomous technology is not quite up to the job yet, other than very simple trials such as Uber’s fleet of Chrysler minivans which are currently trundling carefully around some suburbs of Phoenix, Arizona.
What’s more, consumers don’t like to feel redundant. And autonomy contradicts the ideal of why some people buy a car (power and control, for example). Yes, there are functional concerns around technology and capability, but also emotional, subconscious concerns around redundancy and personal utility.
However, autonomous driving is actually arriving in the mainstream, almost by stealth.
Though manufacturers are keen not to call it that, recent models by Honda, Toyota and others have a series of sophisticated driver aids such as lane-keeping, hazard detection, automatic braking, and so on which when all activated together, could be said to constitute a sort of autonomy. But there is always the unexpected to deal with, so don’t expect full autonomy to be on the spec sheet any time soon.
And is there a real demand? Possibly – but among professionals such as truck companies and taxi firms. Highway freight would certainly be a logical use case, and there is a theory that Uber’s business model is predicated on future fleets of autonomous taxis.
If that has spoiled your future transport dreams, fear not – the Spanish city of Barcelona has just announced a plan to start trials of flying taxis in 2022. In July last year, the Spanish technology company Tecnalia unveiled its prototype for a pilotless, one person air taxi. Designed to carry a person or load of up to 150kg, it has a cruising height of between 100 metres and 300 metres, and can cover distances of up to 15km in 15 minutes. Uber, too has been making noises about the aerial taxi market.
And a UK-based company called Gravity Industries is developing a one-man jetpack, currently for specialist uses such as military and rescue missions, which could be in use as early as this year.
The sci-fi future is here. Maybe.