Wednesday, 7 May 2008

The Death of the SUVs is only the beginning

Mike "Mish" Shedlock of the Mish's Global Economic Analysis blog fame has good commentary on the Boston Globe article about the death of SUVs. Finally American drivers are starting to see the light and are switching to more fuel efficient vehicles. This does not bode well for the already gasping American automakers, which can die for all we care. It's evolve or die. They have fought evolution for so many decades it was only fair if they went belly up. But of course they are politically too big to fail, but change their must and that change is going to be painful for them. They will have to dig up their old engineering books and start building aerodynamic, light, small, fuel efficient, low emission and safe cars. That will take some time, as after more than 50 years of reckless abandon in car design, they have probably not learned as much useful things as Toyota has forgotten about building good cars for the 21st century.

Now that American's are slowly starting to abandon the Stupid Useless Vehicle (aka SUV), will it change things in a material way?

The answer is a firm No.

US personal car fleet replacement rate is c. 2% per annum. The fastest car maker in the world (Toyota) has a product cycle of 7 years (from concept to production). Those slow down things a lot. The market share of hybrids is a paltry 3% of all cars sold in the US.

There are 300 million wasteful internal combustion cars in the USA. Changing 2% of USA car fleet to hybrids would cut oil consumption 1%, assuming all new cars sold were best-of breed hybrids and the old cars would actually be decommissioned from use and not sold as second hand cars, thus keeping within the car fleet pool (neither of which is going to happen, even if it's legislated as mandatory).

The worldwide oil depletion will be anything from 4-8% per annum once the final decline starts after the peak.

You do the math.

We are looking at death of more than just the SUVs.

If you drive a car, it's time you started preparing yourself mentally for the inevitable.

And no, no amount of hydrogen/biodiesel/electric/compressed air cars is going to change that equation on the mass scale. Yes, they will offer some local, temporal & small scale alternatives to some, but the world of driving is going to be a lot less congested in the 21st century.