The big three American car companies are cautiously optimistic. After a dreadful 2009 when sales plunged to 10m and the auto giants teetered on the brink of collapse, sales in 2011 are predicted to be up to 14m. After federal bailouts GM and Chrysler are still in business while Ford is even profitable.
The US manufacturers are wrong to be optimistic. They specialise in a product – the oil powered internal combustion engine – that is coming to the end of its product life cycle. The internal combustion engine has had a good run for 100 years but its days are numbered. Just as the era of the steam locomotive ended its 130 year run in the 1960’s, so the internal combustion engine will start to be phased out over the next 10 years or so. The future of personal transportation is electric and the big three just don’t get it.
Chinese car manufacturers do though. The China Association of Automobile Manufacturers is committed to putting half a million all electric vehicles on the road by 2015. While this is only about 0.5% of the total number of cars in China, the quantity of electric vehicles will rise rapidly as both the price of oil and the Chinese demand for cars moves ever upwards.