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U.S.: Gas Prices, Economy Raise Stakes for Cleaner Cars

Kathryn Barry

NEW YORK, Feb 10 2010 (IPS) - The Chinese auto industry surpassed the U.S. in car sales last year, according to a recent report, raising the question of whether this represents a bump in the road for the U.S. auto industry or a long-term shift to other means of transportation.

“My suspicion is it’s just a blip,” said Michael Walsh, board chairman of the International Council on Clean Transportation. “If you look at the long-term pattern, too often it’s the perfect storm: two wars and a recession. But if we get out of this, the vehicle market will come back. But I hope that it will be much cleaner and more efficient.”

Walsh, also an independent consultant, was fresh off a visit from Hong Kong, where he has worked for 20 years with Chinese government officials to develop cleaner motor vehicles.

“They identified that the auto industry was the backbone of their economy,” he said. “The government is stimulating the vehicle market especially for small vehicles. And at the same time, their economy is doing quite well. Years ago it was rare to see a car in Shanghai or Beijing. Growth is tremendous, and I’m trying to encourage them to put tighter pollution controls. ”

The U.S. automobile industry shrank overall by four million in 2009, with 14 million scrapped in the federal ‘Cash For Clunkers’ programme, and only 10 million new cars sold.

In a conference call with reporters last month, founder and president of the Earth Policy Institute Lester Brown noted that after 60 years of uninterrupted prosperity for the U.S. auto industry, the fleet took a two percent hit that could translate into 20 percent by 2020.


And it’s not just the economy to blame, he said. Concerns over climate change, carbon emissions, congestion issues, and gas prices have led consumers to skip buying new cars in favour of public transportation or environment-friendly vehicles, he said.

“The stage is being set for shifting public investment,” he said. “As the fuel economics become more clear, we’re going to see a much more rapid shift to electric or hybrid cars.”

Toyota surpassed General Motors in sales, due to the success of the 50-mpg Pruis hybrid, representing consumers’ response to higher gas prices û although the 2010 model is currently under recall for safety problems.

Brown calculated that vehicle congestion costs the U.S. 17 billion dollars in fuel, time lost, and other factors, another reason urban areas are improving their public transportation systems and increasing the charge for parking.

Money saved from less congestion could free up funds in other areas for public works spending. Bike lanes have been a major initiative in big cities such as New York, where Mayor Michael Bloomberg led a transportation initiative to promote cycling.

The city wants to complete 1,800 miles of bike lanes by 2030, according to the Bloomberg administration.

High-speed transit systems are also set to be built in many major cities.

Young people’s interest in automobiles has tapered as well, Brown argued. Once a rite of passage, many young teens aren’t getting licensed.

According to a report released by the U.S. Department of Transportation this past January, 30.7 percent of 16-year-olds got their licenses in 2008, as opposed to 44.7 percent in 1988.

Many recent college graduates are struggling with unemployment, student loans and health insurance, he added.

Japan reached that saturation point in 1990, he said, when its annual car sales declined 21 percent.

Meanwhile, China’s car fleet is expanding due to the rise of the middle class, and a large consumer market is being tapped, according to a June 2006 McKinsey Global Institute (MGI) report.

China is also focusing on wind energy, building a wind complex that produces 100,000 megawatts – the equivalent to 11 coal-powered plants, Brown said.

Two-thirds of India-based Tata Motors’ earnings come from its truck and commercial vehicle business, according to a January 2010 Financial Times report, keeping India competitive in the auto market.

Asked by IPS whether U.S. automakers would evolve with the trends or be faced with an eventual global fuel efficiency mandate, Brown said the market has shifted from being competitive to being globally aware. Companies are diverting their interests to environmental concerns and fuel efficiency over size and style.

He added that market saturation has played a role in the U.S. fleet’s tumble. There are currently 246 million registered motor vehicles in the U.S. and just over 200 million licensed drivers, he stated.

Some contend that 2009 was not your average year. There was the government-backed Cash for Clunkers programme, giving consumers a 4,500-dollar voucher for trading in their old, fuel-guzzling vehicles for newer cars with better fuel economy. Adding to that, there was a massive credit crunch, but they say that this too shall pass.

Tim Halbur, managing editor for Planetizan, a website dedicated to urban planning issues, said that many U.S. citizens still see their car as a second living room.

“People love being in their car,” he said, adding, however, that the cost of buying, owning and maintaining a car has become too costly.

“The trend is more towards ‘smart growth.’ When you design places to be centred around pedestrians, biking and transit, they turn out to be a lot more pleasant, efficient, and healthier. The green movement is causing people to be more aware.”

But many people do not live in places that are conducive to getting around by foot or bike, he said, leading to more energy efficient cars instead of doing away with them.

 
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