Trends shaping the world of mobility: Part 1The first of two analyses looks at technology and economic trends impacting future mobility.
Low-carbon mobility“Green cars” continue to light up automobile shows across the world. Responding to the demands of regulators and consumers, car manufacturers are producing leaner, cleaner automobiles that reduce CO2 emissions. Some rely on more efficient or smaller engines, others on alternative fuel sources.
The rise of low-carbon mobility, while in sum a positive development, does have some challenging implications. Infrastructure is one key issue – electric cars, for example, require a network of charging stations, and utility companies must be prepared to handle the increase in demand for power.
On the other hand, the development of new technology and infrastructure provides excellent new opportunities for growth and investment.
Continued development of telematics
Telematics is the use of digital electronic systems to monitor a vehicle. This includes GPS navigation, driver safety systems, and emergency warning systems. Insurance companies are also now using telematics as another way to help manage and reduce risk – for example, insurer Allianz has introduced telematics systems in a number of markets. wireless technology.
This “black box” technology also offers accident and breakdown assistance as well as lost and stolen vehicle tracking and recovery. It can also help fleet managers to better manage their fleets.
Telematics has the potential to transform not only the insurance business, but also our concept of safety. For example, could automatic reporting of drivers’ speed eventually replace the need for highway police and speed detection radar? Infrastructure could also be radically changed, with “driverless cars” that communicate with digital roadways via GPS and wireless technology. However, the important concern with telematics is adherance to local data protection laws.
Volatility of mobility-related costsThe ongoing global financial gloom has set the costs for all sorts of mobility-related goods and services on a volatile path. For example, in the U.S. fuel prices fell by 0.6 percent in October 2012, after climbing seven percent the previous month.
Despite falling gasoline consumption due to a 20 percent improvement in vehicle fuel efficiency and a weak economy, and despite U.S. oil production being at its highest level in a decade—factors that should theoretically result in lower fuel prices—prices have generally gone up. Middle East tensions and “deficiencies in North America’s oil infrastructure” were to blame, argued Forbes magazine in a March report.
There is also some uncertainty as to how the costs of mobility are trending overall. According to Destatis, the statistics bureau of the German federal government, the prices of purchasing a car, gasoline, bus tickets, railway tickets and many other items of transport in Germany rose 8.3 percent between 2005 and 2009. However, the European Commission’s most recent car price report, issued in July 2011, showed that automobile prices in the EU actually fell by 2.5 percent in real terms in 2010.
Increase in regulation
Regulations impacting the mobility sector can be broadly grouped into two categories: environmental and safety.
Across the world, governments are beginning to imposing new rules for emissions and fuel economy; for example, in Europe, regulations require that vehicle CO2 emissions should be reduced by 20 percent. Automotive suppliers that fail to meet these new demands will find themselves at a major competitive disadvantage, according to KPMG consultants in a 2010 white paper.
In China, the world’s largest automotive market, a different kind of regulation is making serious waves. In December 2010, the government of Beijing introduced a new set of laws aimed at reducing automobile traffic and pollution. The measures included limitations to the number new license plates to be issued each month, and a ban on vehicles registered outside Beijing from entering the city during rush hour. Two other Chinese cities, Guiyang and Guangzhou, have since introduced similar regulations.
In its 2010 assessment of the new Beijing regulation, consulting firm Ernst and Young indicated that while there was “significant uncertainty regarding the wider implications of the restrictions on demand and also the wider auto industry in China,” it predicted a 10 percent decline in the annual growth rate in vehicle sales and an increase in the demand for alternative mobility services like car sharing.
Read about car sharing and other demographic trends affecting mobility in Part 2.