/ 17 April 2007

Noose dangles for car and oil industries

We South Africans are a funny lot — perhaps because of the violent land we live in, we toss all other concerns out the window. Give us a choice between ABS brakes and an upgraded sound system in our cars and we’ll vote for the entertainment just about every time. Pollution? That’s simply not an issue to most of us, no matter how hard we try to pretend it is.

If it costs R500 extra per car to slash exhaust emissions by 70%, most South Africans would rather opt to keep the cash in their pockets. Perhaps our outlook is more realistic than that of those who lose sleep at night because they’re fretting about the rainforests. Make hay while the sun shines, we reckon, because in 10 or 20 years’ time nothing’s going to be the same in the motoring world.

Although modern cars are considerably more environmentally friendly than their forefathers, the number of them on the roads is growing dramatically worldwide, due mainly to the rapid expansion of Asian economies. For decades the West has enjoyed virtual exclusivity when it comes to the availability of personal motorised transport, but the wheel is turning, and not so slowly.

According to research done for the Strategic Analysis of Global Markets for Engine Technologies by Frost & Sullivan, 69% of vehicles globally will still run on petrol in 2015, and 26% will still use diesel fuel. Just one in 20 cars will be a hybrid, running on a combination of ordinary fuels and electricity, and even such vehicles are not squeaky clean environmentally — they’re just better than what we have now.

Technology will make motor vehicles more efficient and environmentally friendly, but there is still going to be a huge problem with pollution. A separate but very real issue is the matter of supply and demand — as China and India grow their economies, the number of cars globally is going to increase in leaps and bounds, and many of those manufactured for sale in developing-world markets will use older technology, with fuel consumption and emission levels unacceptable in the West.

Let’s take a look at China. With a population of 1,3-billion people, China has today about 20-million cars on its roads — 19-million more than there were in 1990, and eight million more than there were just three years ago. In 2005, China had just eight vehicles per thousand people, compared with 584 in Europe and 940 in the United States.

If China reached the same level as Europe, its roads would be flooded with 759-million vehicles — more than there are cars on the entire planet today. Although a Chinese middle class is rapidly evolving, it’s unlikely that ownership of cars as we know them is ever likely to reach similar heights in that country, because the world’s fossil-fuel reserves would disappear in a flash.

Factor in the huge growth in the economy of India, as well as the enormous potential of Africa, and the future looks very scary indeed. Still, to paraphrase Samuel Johnson, nothing focuses the mind like the knowledge that one is to be hanged in the morning. The automotive and oil industries can see the noose dangling in the distance, and you can bet your bottom dollar that the larger it looms, the more they will focus their minds on cleaning up their act and looking for viable — and, of course, profitable — alternatives.