Notes of caution from an optimistic futurist (video)
This article also appears in
Subscribe now »

Asked if he was an optimist, Peter Phleps answered: "Yes. I’m really looking forward to shaping the future of mobility together with all these people who have joined this Congress."

Notes of caution from an optimistic futurist (video)

The so-called BRIC countries (Brazil, Russia, India, China) are indeed properly pursued as automotive growth markets, “but maybe some of us a little overestimated the growth potential”—especially for China.

That observation by SAE 2014 World Congress keynoter Peter Phleps of BMW’s Institute for Mobility Research (IFMO) was followed soon after by this one: “I really believe in the industrialized countries that we should keep in mind that the period of strong growth is over—at least with respect to [passenger miles traveled per capita].”

Despite those notes of caution, the former aerospace engineer says that he, as a futurist, is optimistic for the industry. To make the most of the opportunities available, decision makers need to think more in terms of “what-if” scenarios—rather than try to predict a well-defined future. Which can’t be done, he emphasized. “There are so many uncertainties.”

So while China has a vast supply of potential car buyers, the government there is “ramping up lots of regulations that have damped car ownership and car usage,” said Phleps. And public transportation there will be a higher priority than it is in the U.S. For those and other reasons, he does not think China’s automobile industry will develop to the extent it has in the U.S. “We think countries like India and China are heading on an auto mobility path that’s somewhere between Japan and Germany over the past decades.”

Brazil’s auto industry likely will develop in a way similar to how Australia’s has, according to Phleps. He didn’t comment on Russia.

Disposable income and fuel prices are major variables that impact private car ownership rates in all markets, Phelps noted.

He believes it is unlikely that any country will become as car-dependent as the U.S. In addition to average personal income, geography/topography, and other quantifiables, the U.S. auto industry has benefited in an unquantifiable way from a strong car culture—think drive-in diners and television shows such as "Knight Rider" (Phleps twice confirmed his admiration for the show as a kid, in the process perhaps confirming Germans' fondness for actor/singer David Hasselhoff).

Cultural factors have a significant role to play in all markets. For instance, Phleps noted, a greater concern among Gen Y around the globe for sustainability means car ownership is not as high a priority for that group as it was for earlier generational categories. One expression of this attitude is Gen Y’s greater amenability to car sharing.

One can take a pessimistic view of that, Phleps said, but an optimistic view is warranted: “It’s just nonsense to believe those people will not use or buy cars anymore,” he said. “Those will be the customers who will most likely also be mobile and will spend maybe a little extra money for all of those alternative-engine technologies” such as partial and full-electric vehicles.

Click here to watch a one-on-one interview of Phleps by Automotive Engineering.

Click here to view various reports from the IFMO.

Continue reading »