Some observers say our culture is entering a revolution in personal transportation. They cite the advent of ride-hailing companies such as Uber and Lyft, the availability of shared cars and bicycles, and the emergence of autonomous automobile technology as signs that the century-old American love affair with cars (as we know them) and car ownership is fading.
Decades from now, these observations could prove to be correct. But for now, domestic car sales remain strong overall. Total vehicle sales in July — 16.77 million — were up slightly over June. Since then, sales have registered a slight downtick, but this may be a normal fluctuation and probably doesn’t augur a reversal of robust sales in recent years. In 2015, U.S. sales beat the record set 15 years ago.
While predictions that the transportation revolution will hurt auto sales may be premature, forces in play could prove these predictions correct over a decade or two. Autonomous cars will eventually be a commercial reality with broad consumer acceptance, but this likely won’t happen as soon as many predictions hold. Some say that in five years we’ll all be dropped off at work by our autonomous vehicles which, instead of parking themselves, will wait at home for one spouse or the other to summon them with smartphones. Thus, today’s two-car families would be able to do just fine with one car, and cars sales will decline.
There are clear signs that this scenario will likely be much further than five years away. Profound social impact is probably more like 30 years off, when 95 percent of all U.S. passenger travel will probably come from self-driving fleets, ending the current model of car ownership, according to a study by RethinkX, a technology analysis group.
But in the interim, while ownership persists, this evolution may not hurt auto industry revenue much, as autonomous cars will likely be frightfully expensive.
Daniel Ammann, president of General Motors, recently predicted that forces including autonomous cars and ride sharing will mean greater change in the auto industry in the next five years than it has seen in the last 50. Yet some analysts, including Tony Hughes of Moody’s Analytics, point out that the eventual impact of these factors on the industry might not be significant if driving habits don’t change. If people persist in parking their cars instead of summoning them when needed, demand wouldn’t change much.
Currently, all-electric cars such as Tesla and its…