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We Drive Less: True or False?

12/12/2013 03:05 PM EST
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junko.yoshida
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Shrinking market?
junko.yoshida   12/12/2013 3:23:34 PM
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Sooner or later, every industry will come to a point where the market is matured and the industry needs to think differently in order to survive. The automotive industry stands at that point -- at least in the U.S. market.

TV market (also the U. S. cable TVs) has gone through that, the landline telephone market definitely already went through that, the PC industry is going through that, now.

The question is how carmakers can morph their today's mainstream car business into...exactly what? Developing apps for their cars? Building cities? Getting into the transportation infrastructure business? The transformation of the automotive industry will definitely reshape the business of tech suppliers to carmakers as well.

 

 

krisi
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Re: Shrinking market?
krisi   12/12/2013 6:52:48 PM
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Very interesting questions Junko...many automakers put more technology into cars but unless people are willing to pay more I am not sure that will increase their revenue...getting into smart cars might be a good jump start into getting into smart cities, building electrical infrastructure that runs transportation and entertaintement for all of city dweller...it is going to be interesting to see how this industry matures and transforms...Kris

junko.yoshida
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Re: Shrinking market?
junko.yoshida   12/12/2013 7:26:29 PM
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@kris, agreed. I know a lot of carmakers are talking about adding values to their cars by putting more infotainment and Internet connectivity (connected cars); and piling on many ADAS features, which they hope will eventually lead to self-driving cars.  

But after adding all these advanced features, what happens next when many fundamentals among people who will consume cars are changing?

krisi
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Re: Shrinking market?
krisi   12/12/2013 7:58:07 PM
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I agree JUnko...that is why I don't want to buy a car with too much entertainment and communications capabilities...I have my own devices that I use in a car-less situations...car just needs to drive...and I walk and bike, or use public transportation most of the time anyways...personal view of course, but I see many young people in Vancouver where I live having similar driving patterns...Kris

Bert22306
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Re: Shrinking market?
Bert22306   12/12/2013 9:36:47 PM
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Interesting article, Junko! Irrespective of what the auto companies think, this should be great news in every other respect. Assuming these stats say what we think they say. It seems that if the trend started in 2004, so it can't really be attributed to the economic downturn (which started in 2007-2008).

Possibly, if young people are having fewer children, and having them later, or not having children at all, that would cause a reduction in miles traveled per household. It would also encourage young people to live closer in to work and entertainment, in more walkable settings.

In some demographic groups in the US and also in Europe, the more affluent who would be buying the cars and driving more in the past, this fertility reduction is indeed the case. That might explain some of this. (Plus, the kids are too busy texting and playing computer games. :)

Check the hospital statistics to see who is having babies these days. I'll bet that will provide some useful info.

Dr. Bloom
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Index the Dollar, + Rental burdens
Dr. Bloom   12/12/2013 10:52:45 PM
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The numbers presented are charming but do not speak to the hard earned dollars that people are earning today. Distance to and from work has moderated but the overall rental expenses are continuing to escalate. Your information just scratches the surface of the quantum nature of our transportation systems.

We certainly do need to set our sights on more adventurous travel for all. 

from_Tokyo
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Re: Shrinking market?
from_Tokyo   12/13/2013 1:18:33 AM
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This is an interesting article about the trends in the USA.

Although I don't have the statistics, a similar trend is happening since several years in Japan: the younger generation is not so interested anymore in owning a car. This seems to be one of the reasons why year after year car sales in Japan is declining. The Toyota video in your article is therefor not only directed towards the USA, but also towards their home market.

jeremybirch
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Re: Shrinking market?
jeremybirch   12/13/2013 6:04:59 AM
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Having less people driving and less miles driven is generally a good thing I believe. The huge rise in motoring was driven by two factors - private transport being cheaper than public transport (at least perceived to be) and city layout meaning people worked a long way from where they lived. In America this second factor was driven and enabled by the car, hollowing out cities over the last 50 years, building huge shopping Mall's outside the urban area, excluding decent living spaces from wehere people work etc. This in turn forced the use of the car because low density housing makes public transport unviable (not enough people getting on at any given stop, for instance).

Factors since 2000 that change this I think are twofold: the price of oil has risen from around $25 to over $100 per barrel, thus making the cost tradeoff change significantly. In addition to this, we can do a lot more from home via the internet, so we don't need to drive so much, even to get to work.

Why younger people are so largely affected - they seem to be bearing a lot more costs than we did 20+ years ago (certainly the case in Europe) so taking on the large fixed costs of a car may seem unnecessary to them, especially when they can do so much without it (and may have got used to other forms of transport at University etc).

 

 

 

junko.yoshida
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Re: Shrinking market?
junko.yoshida   12/13/2013 6:16:55 AM
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@Bert, I agree your analysis that possibly explains this trend: people are having fewer kids (or having them later) and young people are too busy texting (or my interpretation of this would be that people are in general more satisfied in their virtual world, less interested in actually getting somewhere).

And those factors you brought out are not just applicable to the United States, but in Japan and in Europe, I assume.

As much as I hate the word "mega trends," I think this "mega" trend will have far-reaching implications for electronics products and technologies we develop in the years to come. 

junko.yoshida
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Re: Shrinking market?
junko.yoshida   12/13/2013 6:23:47 AM
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@from_Tokyo, I suspect that the trend in Japan is not just similar but could be more pronounced than the ones I described in this article. 

I never thought much of the big vision stuff -- like Toyota's ha:mo -- Japanese companies love to trot out at every tradeshows. But when I started thinking about how we are driving less and owning fewer cars, I suddenly realized dthat Toyota's promo video, as much self-serving as it is, actually makes sense. Carmakers need a plan B. 

The days of depending on young generations to snatch up cars (like in 60's) are long gone. 

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