Five Big Auto-Centric Trends for 2014
Urban driving will decline. Cities (starting with Europe, but it’s spreading) are getting really aggressive to reduce congestion and improve air quality, and that means a bunch of things—bike sharing, cargo bikes (even for moving!), new public transit options, no-go zones for cars, buildings without garages. Some cities, including Beijing, are even limiting new car registrations. Zero-emission EVs get a free pass, however—in London, they avoid the downtown congestion charge, in California they travel solo in HOV lanes, and in Oslo they can park free. They’ll take over from some gas guzzlers on city streets.
China looms large. There’s all sorts of crazy stuff going on there. Here’s a shocker: Despite the country’s robust auto industry—524 models offered by 96 brands—foreign firms control more than half (60 percent) of the domestic market. The fight for market share in that huge market will get more intense in 2014. GM already sells more Buicks there than it does in the U.S., and the company is in a pitched battle with VW for China sales. Tesla just opened its first store in Beijing, and the company is trying to trademark the name “Te Si La.” Chinese companies are still far from establishing a beachhead in the U.S. market, and the one company with a U.S. office (not to mention a Warren Buffett investment), stumbled in 2013 with labor difficulties.
Fuel economy matters. Despite gas prices being all over the place—who’d think that we’d be happy just to see a gallon under $4?—fuel economy will be an even more important factor in American car buying than it was in 2013. That’s a trend that isn’t going away. Even if the marketplace wasn’t responding, carmakers would be compelled to act by looming state and federal mandates. Here’s a case in point: the tiny Honda Fit, anchoring a class that barely existed in the American market 10 years ago. But Honda sold 4,140 of them in November, up by 1,000 from last year. It sold only a third as many burly Ridgelines. The Fit placed second in Consumer Reports’ value survey for the compact class, and that should sell a bunch more of them in 2014.
Self-driving cars are works in progress. No, we won’t see them in 2014, but we’ll see pieces of them—increasingly sophisticated systems that will intervene to keep us in our lanes, avoid collisions, apply the brakes, and even take over in traffic jams. By 2020, some cars will have limited autonomy, maybe even do some freeway driving, but by 2025 we may be finally sitting in the back seat playing with our smart phones—or whatever they call those things by then. Google, Volvo, Audi, GM, they’re all really into this. And it fits right into trends of young people losing interest in driving.
Fuel cells are coming. By the end of the year, we will start to see the first commercial hydrogen-powered cars on the market. At the upcoming Consumer Electronics Show (CES), Toyota will display the FCV Concept, a sedan that spokeswoman Jana Hartline describes as “very close” to the production vehicle that will hit the market around 2015. Hartline says it has a range of over 300 miles on a fill. She describes $50,000 as “a reasonable target price.” Infrastructure remains the “elephant in the room,” and in the U.S. only California is likely to have it by 2015 (with perhaps 25 refueling stations). And stationary fuel cells have big applications, too.
2014 is going to be a great year. Glad I’ll be around for the ride.