Is it possible that cars are about to go the same way as DVDs, CDs or cameras?

By Global motoring industry swerving off the road

Posted on January 16, 2019

Every year since 1899 (with the odd break for World Wars), the motoring year has kicked off with one of its most influential events, the Detroit Auto Show, held in mid-winter Michigan, but this year’s event, which begins today, will be the last of its kind.

Yes, the North American International Auto Show, as it’s officially known, will return in 2020, but it’s moving to June, in a perhaps desperate attempt to get more punters through the door. Sadly, many of the car companies that have also stopped paying to attend will not return (Audi, Jaguar Land Rover, Mercedes-Benz and Mini all pulled out this year alone).

Nor does it seem likely that the media attention will somehow magically grow back, because the importance of Detroit has been very much usurped by the vast Consumer Electronics Show (now just CES) in Las Vegas, also held each January, in far more pleasant climes.

It is a particularly telling shift in what not only the media, but the world it serves is interested in, because it is the rise of technology, gadgets and screens that is threatening to not just change the car industry forever, but run it off the road.

Experts, including Jaguar design guru Ian Callum and Professor David Bailey of Aston University, agree that the industry will see “more change in the next 15 to 20 years than in the past 100”.

The challenges include younger generations that simply don’t see getting their licence as a vital part of growing up any more, and many who’d prefer to spend their cash on a travel pass and an iPad instead; pressure to reduce carbon emissions; autonomous technology taking all the fun out of driving and, perhaps most pressing of all, the possibility that ride-sharing and car-sharing services will entirely disrupt the car-selling model.

And the bad news isn’t just theoretical, because the cuts are coming across the board, which is no wonder when you consider that A$179 billion was wiped off the value of car companies around the world in 2018.

Last year, General Motors – which recently shut down car manufacturing in Australia, leaving Holden to become an import-only brand – announced it would cut almost 14,000 jobs and would close some of its US plants due to falling sales and a market tipped to slow even further this year and next.

In Britain, Jaguar Land Rover followed suit, cutting 4,500 jobs due to weaker sales in China and big falls in the sale of diesel models, partly due to the “Dieselgate” scandal kicked off by VW, but also thanks to the fact that European nations are now openly canvassing the idea of banning the fuel altogether, because of concerns over emissions and poisonous particulates.

The increasingly likely no-deal Brexit is also causing sleepless nights for JLR executives and other car makers. Ford has also announced cuts to its European operations.
The car industry has already been rattled in recent months by the scandal surrounding the previously untouchable, and even worshipped, Carlos Ghosn – head of the Renault-Nissan-Mitsubishi alliance – who was arrested and jailed in Japan over alleged financial irregularities.

While it’s possible to argue that people will always need personal transport, car-company executives, including those at Audi and Mercedes-Benz, are willing to admit that selling cars will become a smaller and smaller part of their business.

It’s already possible to buy a membership of a program, that will deliver you the kind of car you need each week, rather than having to choose just one. And once cars can drive themselves, a technology that gets closer by the day (the world’s largest car-maker, Toyota, has put half a billion dollars into a driverless-car partnership with ride-sharing giant Uber), who is going to worry about which brand they’re driving when they’re basically all the same?

Despite their ubiquity, is it possible that cars are about to go the same way as DVDs, CDs or cameras?

We’ll leave the last word to Professor Karel Williams of Manchester Business School: “The car as we know it may be on the edge of becoming history, the way that [photographic company] Kodak became history.”

As for the question of whether the death, or even diminution, of a motor show is the sign of things to come, consider that the Australian International Motor Show was a constant of the local motoring-enthusiast’s calendar from 1925 to 2013, when it was cancelled, forever. And the number of local car makers in Australia today? Zero.