The future of the automobile

The 2000s were the decade of the SUV in the US, and it's no surprise that GM, the world's largest car and truck manufacturer for much of that decade, poured the bulk of its resources into developing some of the world's largest passenger vehicles. Its Suburbans, Escalades, and Hummers fulfilled huge demand in the domestic market,while representing an important product categoryfor GM abroad.

But things are changing, as they always do, and there's no better symbol of the current atmosphereof transformation than GM's plans to scuttle the Hummer brand after failing to attract a buyer.

Yet these large vehicles aren't on the ebb everywhere, as SUVs continue to post strong numbers here in the UAE. Audi, for instance, has seen salesof its Q5 and Q7 models rise in the first quarter of 2010 with the relatively new Q5 up 224.2 per cent and the larger, and already popular Q7 gaining 7.7 per cent. Combined, these two models account for 38 per cent of Audi's sales in the UAE, making them its leading models here. And yet globally, Audi's A3, A4, andA6 saloons all outsell their Q series, indicatinghow unique the UAE market is.

Gaining popularity

While GM has silenced the Hummer, larger vehicles are re-emerging in hybrid format, as with the Tahoe Hybrid, which was the first commercial hybrid to be introduced in Dubai. Hybrid technology pairs a conventional combustion engine with an electric motor, alternating between the two to both power the car and charge a large-scale lithium-ion battery. The technology is not earth-shattering in its fuel economy, and sub-compact vehicles with conventional engines still outperform hybrid fuel efficiency in some cases. While Honda and Toyota led the initial charge, US manufacturers adopted the technology next, and Germany has �lately answered the call with hybrid iterations of the Audi A8, VW Touareg, and BMW 7 series among others. Hybrid sales are still not expected to constitute a large percentage of auto sales, and the automotive industry analyst group Edmunds estimates that 2010 hybrid sales will account for just 3.2 per cent of sales in the US market.

Meanwhile, a large amount of media interest has centred on fully electric vehicles such as the Tesla Motors Model S. Yet, according to Zhenwei Zhou, PhD, Senior Statistician for Edmunds, it will be tough for electrics to gain a foothold in the market. "Early adopters will boost electric car market share upon launch, but it will take some time before significant market share builds for the segment," he says.

Hybrids and electrics may garner a disproportionate amount of attention relative to their current sales levels. But that's simply because they represent the leading edge of a green movement in the automobile industry that, while neither fully developed or fully arrived, represents the way forward.

Just as Toyota was an early adopter of hybrid technology, Audi first championed All Wheel Drive (AWD) 30 years ago with the launch of Quattro, and has seen this safety-conscious concept adopted by manufacturers across the globe. While AWD cars were something of a novelty as recently as the late nineties, Audi, Subaru, and Volvo all helped propel AWD into the mainstream with their versions. As new technologies can take a while to catch on, it's certainly possible that hybrids will be around for quite some time while manufacturers pursue even more efficient solutions.

Market leader

Around the time the Prius, Toyota's flagship hybrid,was catching on in Hollywood, the Japanese manufacturer surpassed GM as the number one manufacturer worldwide, a fact that has little to dowith Prius sales. With great success often comes great problems, and Toyota has weathered a storm of bad press lately as the list of Toyota safety recalls in the US continued to mount in the shadow of fatalities linkedto runaway Toyota vehicles.

Facing stark criticism on Capitol Hill, and admonishment from the US National Highway Traffic Safety Administration that as many as 39 deaths may be linked to unintended acceleration in Toyotas, Akio Toyoda, President of Toyota Motor Corporation, made a very public apology, offering: "I am deeply sorryfor any accidents Toyota drivers have experienced."

While GM recently repaid $8.1 billion (about Dh29.75 billion) in government loans, five years ahead of schedule and nine months after declaring bankruptcy, the company is not expected to overtake Toyota any time soon, despite Toyota's rather public growing pains. Which isn't to say that Toyota hasn't suffered financially in the wake of the recalls.

During the first quarter of 2010, trade-in of existing Toyota vehicles for new Toyota vehicles was down 4 per cent from the first quarter of 2009. So while Toyota still boasts the highest level of brand loyalty among manufacturers in the US market, it's fairto say that its tarnished image has somewhat muted enthusiasm among Toyota owners.

Car sales in Europe and the US have startedto recover from the rash of red ink in 2009, although it's unclear what will happen going forward globally, particularly with looming uncertainty in the European Union. Still, the UAE remains one of the stronger automotive markets, helping to buoy a global car market that has struggled to get back on track.

Whatever the news may be from Germany, Japan, and the US, it's unlikely the UAE's collective loveof all things automotive will decline anytime soon. n