If necessity really is the mother of invention, then surely the auto industry is on the verge of an era of blinding brilliance. Times are that bad.
In July, when the price of a barrel of oil shot up to US $147, buyers in the United States dumped their gas guzzlers and lined up for that iconic hybrid, the Toyota Prius. And, astonishingly, by year’s end they had bought 25 000 Smart ForTwo cars, two-seaters so small they make the Mini Cooper, with its lavish complement of four seats, look like a land yacht.
Then, just six months later, oil prices dropped back down, hitting a low of $37 a barrel. Good for drivers, bad for automakers: Such seesawing makes it impossible for them to plan—as they must—what cars they will be selling in three to five years. Then came the capper to that grisly year—the financial meltdown and the ensuing worldwide recession. It humbled what was left of America’s Detroit Three (General Motors, Ford, and Chrysler, which barely counts as a bona fide automaker anymore). It even gave mighty Toyota its first operating loss in 70 years. Auto writers fretted about ”carmageddon” and, more linguistically vexing, heralded ”the carpocalypse.” By the end of the year, the world’s auto manufacturers had just a single imperative: survival.
Consolidation is in the air. Soon there will be fewer car companies, and they will be making fewer kinds of cars.
For a glimpse of the future, look at Volkswagen. It builds more than a dozen separate models, totaling well over 1 million units a year, on the basic components of its Golf/Jetta/Rabbit line. They are sold as Volkswagens, Å kodas, even Audis.
For another view of the future, look at upstart Chinese automaker BYD Automotive, in Shenzhen. Owned by a huge battery-cell manufacturer, it began making cars only five years ago, yet in December it stunned observers by launching the world’s first production plug-in hybrid (see the 2009 BYD F3DM). Early reviewers called the car crude. But the Model T was crude, too. And by getting a plug-in hybrid to market before the end of the calendar year, BYD beat Toyota and GM, both of which are also working on plug-in hybrids, by almost two years.
If oil prices stay low, it may dampen consumers’ interest in the next big thing: electric-drive cars. Big financial incentives from federal and state governments could speed things along, but those governments are now struggling themselves. Nevertheless, lots more partially electric and electric-drive vehicles are about to roll off assembly lines. Here’s the complete list of major world automakers that aren't experimenting with batteries and electric motors: Mazda. Even the Germans have begun supplementing their beloved high-performance diesels with a handful of electric cars.
Europe’s diesel diehards, meanwhile, despair that their hard-won improvements in fuel usage have been undermined by the surge in diesel fuel prices in the United States. And in more bad news for diesels, the Chinese government appears to have shifted its development priority from diesel to electric drive. Meanwhile, researchers all over the world are creating elaborate models to test whether running vehicles on grid power can really cut greenhouse-gas emissions overall. (The answer is usually yes, depending on how ”clean” the local generating mix is.)
In the passenger compartment, technology continues to advance smartly. Telematics—the delivery of data by cellphone technology—is pumping traffic, weather, and gas-price information into car navigation systems in real time.
Digital entertainment also keeps getting better. This summer, the Mercedes-Benz S-Class sedan will offer an in-dash video screen that filters light onto adjacent pixels to display different images to different viewers. The driver can see routing maps, for instance, while the passenger happily watches a movie.
But most of these goodies seem to come from a time that suddenly seems very distant, the time before the meltdowns of the automotive industry and the world economy. Just as contractors will stop building McMansions and investment advisers will stop pushing mortgage-backed securities, so automakers may have to rethink personal transportation.
Usually the hottest new car technology tells us quite a lot about what to expect from the industry, but today that rule may not apply. Desperate times call for radical changes, and that means that even today’s most outrageous concept cars may seem strangely outmoded and quaint in a few years’ time—just as electric cars did in the 1920s.