11 Oct 18

Don’t believe the automotive hype!

The revolution in the automotive industry is always just around the corner. So why does it never seem to arrive? NADA chairman Wes Lutz warns against the proliferation of hypes: “Ask for proof, find out what they’re not telling you”. 

The future of automotive may be electric, autonomous and connected, but there is a marked discrepancy between the slow progress in the real-world mobility space and the head-spinning predictions launched by those who stand to benefit from the spin. 

Addressing a meeting of the Automotive Press Association, Wes Lutz (pictured), chairman of the National Automobile Dealers Association (NADA) in the U.S., warned against precisely such assumptions of massive and imminent, tech-powered change. His point: be suspicious of reports promising huge leaps forward. As if on cue, one such press release arrived simultaneously with his warning. 

1.99 million crashes
Recent research by the AAA Foundation indicates that if all passenger vehicles in the U.S. were fitted with forward collision warning and/or automatic braking systems, an estimated 1.99 million crashes, 884,000 injuries and 4,738 deaths could have been avoided in 2016 alone.

A further 519,000 crashes, 187,000 injuries, and 4,654 deaths could have been prevented or mitigated by lane departure warning and/or lane keeping systems. And another 318,000 crashes, 89,000 injuries, and 274 deaths could have been prevented by blind-spot monitoring.

The report only focused on these five systems and did not investigate other ADAS systems such as adaptive cruise control or parking assistance.

In all, applying all the technologies mentioned above would have the cumulative effect of a 40% reduction in crashes, a 37% drop in injuries and a 29% decrease in fatalities – a figure equivalent to nearly 10,000 deaths.  

Recurring predictions
Specifically, Mr Lutz objects to three recurring predictions about the future of the automotive industry:

  • Firstly, that people will stop buying personal  vehicles;
  • Secondly, that autonomous tech will eliminate traffic fatalities;
  • And thirdly, that dealers are reluctant to engage with the pending EV revolution. 

“Each one of these narratives might sound right. But the truth is that each one is built on false or unproven pretences”, Lutz said.

Car ownership is not just an emotional issue, it also makes economic sense, the NADA chairman said. He cited a study – a different one – by the AAA Foundation, which found that the annual cost of ride-hailing as a primary mode of transportation is twice as high as vehicle ownership: $20,118 vs. $10,049. Without the parking cost, the latter figure dropped to $7,321 – nearly three times cheaper than ride-hailing. 

Fatality-to-mileage ratio
On his second point, Lutz said there simply isn’t enough data to know whether self-driving cars are truly safer. Admittedly, America’s 37,000 traffic fatalities last year represent a staggeringly high figure – but on the other hand: Americans drove 3.2 trillion miles last year, which means that for each of those fatalities, nearly 90 million miles are driven. The advance of ADAS systems would further reduce the fatality-to-mileage ratio, and without removing humans from the equation, Lutz predicted.

And finally, addressing the supposed resistance among America’s car dealers towards electric vehicles, Lutz joked: “I want to sell anything my customers want to buy – it could be powered by turtles. I don’t care… If there’s demand for it”. And that’s the problem: EVs remain more expensive than traditional combustion-engine cars, have lower residual values and don’t power up as easily or quickly. Add the relatively low price of petrol in the U.S., and you have a host of disincentives. 

Questioning the ‘spin’ at the basis of many media stories promising imminent transformation of the automotive business, Mr Lutz implored the assembled auto journalists to “ask for proof, and find out what they’re not telling you. The future will work itself out regardless. I just want us to be informed in the meantime.”

Authored by: Frank Jacobs