End of the cycle

In previous decades, middle class North Americans were enthralled by automobiles to an extent almost unimaginable nowadays.

At the beginning of each new car year, major automobile manufacturers held a show in the lobby of New York’s most luxurious hotel, the Waldorf Astoria on Park Avenue.

Newspapers, then as now, printed a special section featuring the new car models, replete with many photographs and lengthy articles.

Ford Motor Company started replacing its Model T cars.  People flocked to see it.  Innovations such as the self-starter replaced the hand crank. Cars were equipped with heaters and windshield wipers to enable winter driving.

Cars became a principal focus of most people’s lives, the most desirable mode of transportation, as well a status symbol.  If someone owned two cars, they were considered wealthy.

Catering to the demand, U.S. President Eisenhower put forth a major program to create national highways criss-crossing the nation. When radios were installed, many families considered a Sunday drive as the best weekend entertainment.

There were so many in their cars that statistics show about 40,000 were killed in accidents annually.

Then car purchase installment plans were forthcoming and that attracted a new class of buyers that hitherto lacked the resources to buy a car.

Today, people can buy cars with little or no down payment and up to seven years to repay – interest free.  Debt to buy a car now rivals mortgage debt in North America.

Nowadays, like most infatuations, new car enthusiasm is disappearing. Millennials increasingly are less interested. Drivers’ tests since 2007 are down 25 percent in the category of 17 to 25-year-olds. Our urbanization makes cars less important.

In many cities, one can rent a car for a short period or buy a membership in a car share company. Light rail transit, regular train service between larger urban centres, and the advent of Uber taxis has also reduced the need for car ownership.

Many conscientious citizens are trying to help the environment by lowering their fossil fuel carbon foot print.  Riding a bicycle is becoming more popular, as in Europe.

Clearly, the market for cars is getting saturated. In China and the less developed countries, the demand for cars remains strong, but that is insufficient to compensate for the decline in North America. 

All these factors mean that our economy will suffer, presenting a very important and challenging hurdle.

Other than electric, driverless cars, what will be the strategy going forward?



Bruce Whitestone