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Automaker forcasts dramatic changes in future transporation

Published: Sunday, October 7, 2012

Updated: Sunday, October 7, 2012 21:10


Matt Brown

The allure of transportation in the future relies heavily on the advancement of in-car tech. Efficiency is the name of the game.

The auto industry is evolving to meet the demands of both growing urban populations and environmental regulations; two very large factors in future development.

In a recent USA Today article, Chris Woodyard, editor of Drive On, a USA Today blog, paints the advancement of the auto industry as cleaner, more efficient and comprised of a variety of fuel sources.

Woodyard’s article expands on the ideas of one of the industry’s most influential voices, great-grandson of Henry Ford and current executive chairman of Ford Motor, William Clay Ford Jr. Ford is credited for being an innovator. He was behind the environmental movement while other automakers were pushing ever-larger SUVs onto the market.

He was CEO at Ford Motor when they introduced a hybrid version of the Ford Escape SUV that eventually helped the company win the second largest portion of the advanced-drive market behind Toyota according to an poll conducted in November of 2011. Advanced-drive is a term used to describe hybrid, electric, biofuel or solar powered vehicles.

Woodyard cites the increasing population of megacities, large cities with a population above 10 million as a growing challenge for automakers.

According to Ford, “The way we move people is going to have to change dramatically.”

He imagines future drivers integrating their personal schedules, health information, essentially the entire online identity into the vehicle through smartphones “in ways that make getting from one place to another more efficient and safer than ever.” Ford is optimistic about the future of the gasoline engine and believes it will be around for decades to come.

However, Woodyard hints that its dominance may be dwindling. Hybrid engines, combining traditional combustion methods with in-car batteries, have become more popular in helping consumers save at the pump.

Woodyard believes the transition from gasoline to hybrid is already upon us and that the next advancement will be fully electric vehicles independent of gasoline, eventually taking up a larger share of the market.

Ford and others seem to think the battery is the next major fuel advancement, “Electrification is where a lot of us are placing big bets.”

Economic strain has influenced buyers more than any other factor.

Fuel economy is now the leading consideration of buyers when it comes to choosing the next car according to a Consumer Report Survey that highlights a 20 point gap between fuel economy (37 percent) and quality (17 percent).

Safety is the third most important factor, above value, performance, design and technology. The average price of a regular gallon of gasoline is $3.80, 37 cents higher than the price 12 months ago, a 9.7 percent annual increase.

However, purchasing an advanced-drive vehicle isn’t necessarily guaranteed to save you money.

While advanced-drive vehicles do get better mileage per gallon and thus save consumers at the pump, the TCO or True Cost to Own is higher than some standard combustion engines. TCO is defined as the purchase price of an asset plus the costs of operation. Put simply, advanced-drive vehicles cost more upfront than some non-hybrids, but owners spend less in costs of operation through fuel savings.

Over a five-year period, owners of the 2012 Toyota Prius will pay only $5,383 in fuel, representing a $3,000 savings as compared to the five-year fuel costs of a 2012 Ford Fiesta at $8,166.

While the Prius saves you at the pump over time, it requires a much higher purchase price of $24,000 as opposed to $14,100 for the Fiesta.

According to a recent article by Keith Naughton of Businessweek, manufacturers are creating more efficient standard combustion engines to compete with the hybrid market.

The hybrid share of the US auto market is still relatively small and has been declining since 2009 when it peaked at 2.8 percent.

Since 2009, that share has dropped to 2.4 in 2010 and even farther to 2.2 percent in 2011.


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