When Steppenwolf extolled listeners to, “get [their] motor[s] running, head out on the highway, looking for adventure,” it captured a truly unique American phenomena. The automobile is in many ways a symbol of 20th Century America.
The rise of the automobile industry coincided with the post First World War ascendance of American industrial supremacy. In the 1950s, it represented the post War boom, suburbanization, and a symbol of independence for coming of age baby-boomers. Men in grey flannel suits drove to their stable corporate jobs, industrial workers drove to mills, mines, and manufacturers; even counter cultural beatniks and hippies drove “On the Road” to places like San Francisco.
As suburbia designed for cars mushroomed through the expansion of the Interstate Highway System, the automobile shifted from status symbol to transportation necessity. For example in 1983, 84.5 percent of 18 year olds held a driver’s license.
By 2010, the number of 18 year olds holding a driver’s license declined to 60.7 percent. Rising fuel costs, increasing costs of automobile ownership, changes to licensing laws, and the rise of social media have all been cited as reasons.
As part of its Youth Radio program, NPR interviewed Millennials to see how they were making life work without cars. Many are using mass transit, others are car sharing or pooling, and many are using the Internet for things that once required a car trip to undertake. As the late Senator Stevens said of the Internet, “It’s not a big truck. It’s a series of tubes.” That fundamental fact is giving a great many automakers reason for concern.
Over the last century, automobile ownership and the number of automobiles increased in an almost perfect linear fashion. The number of drivers licensed as a percentage of population also increased until the 1980s when the percent started to level off at 70% of the US population, a number that has changed little since 2000.
The trend of fewer young people holding a driver’s license and the decline in automobile sales has seemingly become endemic in North America and Europe. Due to changes in taxes and fuel prices, cash strapped Spaniards bought more bicycles than cars last year. This is only further compounded by the “aging out” of the large post-War generation, retirees drive less as they get older and likely require fewer cars for transportation needs.
One also has to consider that there are more cars than Americans. The major reason for this is expansive corporate auto fleets, but one is hard pressed to not see how saturated the American market has become for automobiles. The dip in car and truck sales observed in the United States over the past decade has led some such as Michael Sivak to conclude that we have reached “peak car.”
So what is an automobile part supplier and an automobile manufacturer to make of all of this?
Well, for one thing, it is not the death knell of the auto industry. The fundamental need for personal transportation in modern society is not going away. Technological change and innovation are a part of any free market so disruption is the norm.
What must be stressed is that people’s desires and expectations regarding personal transportation have changed but not the requirement for transportation. Economic and environmental concerns are changing people’s perception of the automobile and so like any good business, the auto industry has to remember that the customer is always right.
In the next posts in this series, we are going to look at ways in which the auto industry is adapting to changes in consumer preference for transit and the way in which this will affect the auto industry supply chain.
About the Author (Author Profile)John Nash Maravich graduated from Duke University’s Nicholas School of the Environment as a Master of Environmental Management in 2013. His thesis examined the effect of changing fossil fuel markets, capital costs for equipment, and recent regulatory changes by the US Environmental Protection Agency on the United States' energy economy and operational power plant fleet. The project was done in conjunction with NET Power, a Durham, North Carolina based clean energy start-up. Mr. Maravich also holds a Bachelor of Science in Earth and Environmental Science from Virginia Wesleyan College and is a past recipient of the Environmental Protection Agency’s Greater Research Opportunity Fellowship. Mr. Maravich’s research interests are focused on the life cycle of technologies and subsequent assessment of environmental benefit or harm over long periods of time. For leisure, he enjoys hiking, kayaking, and building high fidelity vacuum tube audio equipment and speakers.
Sites That Link to this Post
- Auto Markets: Slow sales may mean Peak Car “Drivers…needed.” #1 : Paid From Savings | October 31, 2013
- Auto Markets: “Maybe you can Drive my Car!” Automakers’ new focus #3 : Paid From Savings | November 15, 2013
- Auto Markets: Parts Suppliers Help Industry “One piece at a time” #5 : Paid From Savings | November 22, 2013