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A racy and readable account of the future of the auto industry

Chandrashekar Srinivasan

ZOOM — The Global Race to Fuel the Car of the Future: Lain Carson, Vijay V. Vaitheeswaran; Penguin Books India Pvt. Ltd., 11, Community Centre, Panchsheel Park, New Delhi-110017. Rs. 395.

This book provides a racy and extremely readable account of the future of the automobile. A tacit assumption — which on balance one can accept as being valid — is that the automobile is a convenience that is likely to stay with us for the foreseeable future.

The book looks at two closely intertwined and inter-linked development trajectories — the evolution of the automobile and the evolution of the oil industry. It raises the question whether this alliance between Big Oil and Big Cars will continue given the large number of problems that have arisen out of the developed world’s fascination for the automobile and the fuel that powers it.

Impact

The automobile, though invented in Europe, had a major impact on America. The book provides a brief but succinct account of how the automobile working in tandem with the oil industry transformed the economic landscape of America. Developments in the U.S. centred on the automobile became a kind of model for other countries to emulate. Is such a model sustainable not only for the U.S. but also for the world given the problems of pollution, global warming and the economic and political crises that it has created?

For those of us who are somewhat old the references to the impact of Rachel Carson’s “Silent Spring”, Ralph Nader’s “Unsafe at Any Speed” as well as the Sheik Yamani-masterminded OPEC hike in oil prices provide a walk down the memory lane. It does of course raise the question whether the future, as the authors see it, will follow the different trajectory they suggest. In my view the authors do make a very convincing case for change.

The decline of the U.S. automobile industry and the rise of Toyota and its success with the Prius hybrid car as described in the book provide a vivid contrast between the American and Japanese approaches to the future. The transformation of Toyota from a low-cost manufacturer to an innovator is well covered.

The inability of the auto industry and the policy makers in the U.S. political establishment to understand and deal with the problems of pollution and global warming raised by the industry’s obsession with the internal combustion engine and low gasoline prices is well brought out and will make interesting reading especially for the MBA audience.

The authors also make a clear case why oil is going to be a big problem not only for the U.S. auto-makers but also for the independent oil producers. It provides a nice contrast between the doomsayers who contend the world does not have enough oil and the optimists who say that new finds and new technologies as well as new sources like tar sands can provide enough oil well into the future.

It of course makes the point that irrespective of the merits and demerits of either approach, global warming concerns, and not the supply of oil, must drive the future of the automobile. The industry therefore has to make the move towards non-carbon, non-polluting fuels. If this path is not chosen by the auto majors they must be forced into choosing it. The policy failures not only of the current Bush administration but also of a number of other Republican and Democratic administrations pointing to a nexus between the oil and auto industries with the policy makers on Capitol Hill and the White House are well known. These are described vividly.

Emerging economies

The future trajectory of the oil as well as the automobile industry is going to be influenced significantly by two emerging economies — China and India. The book raises the question whether they would follow a development model like that of the U.S. or whether they would follow a different approach tuned more closely to the challenges of the present. However their optimistic conclusion that the paths chosen by them would be different and environmentally more sound does not seem to accord what we see in the post-1991 liberalised India. One is not sure whether India and China will learn from the American experience.

The last part of the book looks at new entrepreneurs in the U.S. who are trying to revolutionise the auto industry. It also talks of a new brand of politicians who are promoting the merits of going green. It concludes by setting forth a set of prescriptions,the most important of them being that people should pay the true price for gasoline.

This book is a good read for both the expert and the layman.


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