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Get things moving

With Ford posting losses of over $10 billion, Honda shutting its Swindon factory until June and fields full of unsold cars, we might be excused for thinking that doom and gloom is here to stay.

4 February 2009

12:00 AM

4 February 2009

12:00 AM

With Ford posting losses of over $10 billion, Honda shutting its Swindon factory until June and fields full of unsold cars, we might be excused for thinking that doom and gloom is here to stay. But we shouldn’t, and we can start changing it now.

Probably you’re not thinking of buying a new car today, but what could change your mind? Price. If Ford or Honda were to offer 50 per cent reductions on cars bought in February, more of us would dare to spend. And if they offered 0 per cent finance for the same period (like Citroën and Toyota, on selected models), that would help. Most people, after all, are still employed and will remain so, particularly those in our huge public sector.

If such reductions mean manufacturers sell at a loss, it’s sustainable in the short term. Money inwards benefits turnover and it’s better than selling nothing while maintaining infrastructure in order still to be here when the market eventually picks up. Survival is success, so forget the wider market, create your own. And be bold — remember it’s volume that makes a market.

Of course, this would force second-hand prices down but the ultimate result of that is that older cars are replaced by newer, environmentally friendlier ones and — again — money moves and the market is sustained as your old trade-in moves down the food chain. We all lose a bit, we all gain a bit but, while nothing moves, everyone loses.

Meanwhile, the government offers cautious support by guaranteeing loans to help develop greener cars. OK, so far as it goes — a little may help a little — but there’s no sign of the radical thinking and bold investment that our current troubles should stimulate. Perhaps that’s because it would involve killing a few sacred cows.

The first bovine to go should be the assumption that we need fewer cars on the road, rather than more. Cars currently meet about 85 per cent of the UK’s travel requirements, railways about 7 per cent and buses 6 per cent. The car predominates because it’s convenient, flexible and affordable; it can take us anywhere in privacy and comfort. That’s why the number of private cars increased by 5.3 million to 26.5 million in the past decade and why, with government-encouraged population growth, it’s estimated it will be 38 million by 2040. We not only like it but need it — no modern economy could function without ubiquitous private travel and no democratic government would survive a planned reduction in living standards. Public transport is a realistic alternative only in restricted circumstances — city centres, commuting and long journeys — and is necessary for those who don’t have access to cars, but it can’t work without expensive subsidies, it’s inflexible, often uncomfortable and always public. Most people dislike enforced intimacy with strangers.

But the car entails congestion, resources consumption, environmental pollution and danger. In six articles for Autocar last year, Richard Parry-Jones (former head of R&D at Ford), outlined some persuasive solutions. We shall reduce congestion only when we stop assuming that the way to do it is to force people off roads by restricting the network and by charging extra for what we have. On the contrary, Parry-Jones argues, we should build more roads. Personal private transport is a social and economic necessity and current levels of congestion already threatening competitiveness. Our roads are among the most overcrowded in the world and we pay among the highest vehicle taxes but only a small fraction of vehicle tax revenue is spent on the transport network. Traffic has increased by 60 per cent in the past 20 years, road capacity by 2 per cent. Road-pricing has little impact unless it is punitive, in which case there are unsustainable social and economic consequences. Congestion, meanwhile, increases pollution.

Environmentally, the car is the favoured whipping-boy of this and other governments despite the fact that it contributes only 10 per cent of man-made CO2 emissions (other means of transport contribute a further 13 per cent). But the car is a given, so the question is not how to get rid of it but how to clean it. Parry-Jones calculates that it can be made environmentally competitive with electric trains. This does not require exotica such as hydrogen — still a long way off as a practical fuel — but a mix of current trends such as reduced friction engineering, energy recapture, energy use only on demand, weight reduction, electric power and second generation biofuels. The internal combustion engine will remain in the medium term — it’s much more efficient than alternatives — but in combination with electric power. In fact, in terms of CO2, we’ve been half way there already without realising it — VW’s 1999 Lupo produced 81g/km, compared with 104g/km for the much-vaunted Prius, but was axed in 2005 after selling only 28,000.

Accidents are the price we pay for freedom of movement but safety can be greatly improved by better road design, less congestion and better technology. Rigid enforcements of speed limits have demonstrably not worked. As for exhaustion of fossil fuels, Parry-Jones points out that, ‘The Stone Age did not end because we ran out of stone. We simply invented another technology.’ Sustainable power sources will be with us before we reach the last drop of oil.

Meanwhile, in order to ensure we get that far, buy now and bargain hard. There may never be a better time.

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