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The Auto Industry Changes to Expect for 2020–2029

The shape of the industry in the 2020s can be traced back to 2008.

The year 2019 and the reviews of the decade of the 2010s are behind us. Recaps of the most important automotive events of 2010-2019, from Dieselgate to Carlos Ghosn's fall and very recent escape from Tokyo are everywhere, as are most important cars and designs and engineering feats. You won't find one here, and I'll use as my excuse the math-geek point that a decade begins with year one, so we're still in the decade of the teens, which thus runs from 2011 to 2020. Call me again for my list next December.

Everything that changed in the automotive world in the 2010s began with the Lehmann Brothers' collapse in Autumn 2008 that helped trigger The Great Recession. This coincided with the 100th anniversary of General Motors, which way back then was still the world's largest automaker, based in the world's largest auto market. Since the federal bailout and forced bankruptcy of GM, the automaker—which officially is an all-new corporation thanks to that event—put off complete redesigns of its full-size pickup truck and SUV moneymakers until very recently, while spending a few bucks in order to try and lead the industry with Chevrolets Volt and Bolt.

While GM has barely held on to 17-percent market share and may fall below that threshold for calendar-year 2019, it is still the market leader in North America. In fact, GM also remains very influential in the world's largest auto market, China. So while GM may have long ago surrendered its primacy as the global design and engineering leader, its plans for the '20s, based on everything that has happened to it since 2008 points to trends that are emerging for the 10 years ahead.

In place of "The Biggest Auto News Stories of 2019" or "Biggest Auto Trends of 2010-2019," here are changes we can expect from this industry for 2020-2029:

Turmoil in Europe.

GM sold Opel and Vauxhall to PSA Peugeot Citroën in 2017, and the French automaker quickly turned the German and U.K. brands profitable after they lost money for years under the U.S. automaker. I don't see how PSA, which will control 13 marques including Lancia (which is selling low-profit "fashion city cars" mostly for the local market) after the FCA merger, will keep them all alive. The new company sells seven of those brands in North America. At least two of them—Fiat and Alfa Romeo—may not have much future here, and there's no reason for the French half of the company to carry out its plans to re-enter the U.S. market with the Peugeot nameplate. (Fellow automotive pundit Gary Vasilash believes future Chrysler models could be built on Peugeot platforms.)

But wait, there's more. Automakers based in the European Union, which soon won't include Fiat Chrysler Peugeot Citroën's Vauxhall, have long dealt with keeping local governments and unions satisfied that they won't move production out of their home countries; Thus, the late Fiat Chrysler CEO Sergio Marchionne's promise that all Alfa Romeos will be built in Italy from now on, even if Fiat 124 Spiders are assembled in Japan and Fiat 500s in Poland and Mexico, while Jeep Renegades are built in Italy.

And then there's the new EU CO2 standard.

After years of lagging behind the U.S. in terms of carbon dioxide-emissions standards, the EU beginning this month will make it that much tougher to do car/truck business in Western Europe. The CO2 standards threaten to slowly kill off what's left of the diesel passenger-vehicle business there. While Fiat Chrysler already has launched the Jeep Wrangler EcoDiesel in the U.S., the company's priority in Europe is the plug-in hybrid version of the Wrangler, which goes on sale there any minute now, while the home market doesn't get the powertrain until later in the year.

Meanwhile, back in the U.S., who wants to buy an EV?

GM essentially is out of the European market, and yet it has been most vocal about expanding its EV offerings. While Ford Motor Company has announced an electrified Mustang and F-Series, and most sensationally the battery-electric Mustang Mach-E, GM has promised 20 new electric vehicles by 2023. And yet the current share for pure-electric-powered vehicles in both the global and U.S. market is somewhere between 1 and 1.5 percent.

Not all of those GM EVs are cars…or trucks…or available in the U.S.

The first two of those 23 GM EVs are on sale already, in Germany, Belgium, and the Netherlands. GM's Ariv Meld is a $3,160 compact e-bicycle, and the Ariv Merge is a $3,835 folding e-bike. Looks like GM has a post-Opel/Vauxhall EU strategy, after all.

Speaking of bicycles…

As major cities across the nation have added protected bike lanes, and bicycle commuting becomes more popular, bike fatalities from collisions with motorists have increased severely in the past couple of years. No matter whether you're a driver sympathetic or antagonistic toward cyclists, experts and bike advocates generally agree that much of the blame goes to smartphones (in the hands of the motorists). Perhaps if fellow drivers can't get other motorists to limit their smartphone use, militant cyclists will.

The German auto industry is not immune.

Writing for the op-ed page of the New York Times, Anna Sauerbrey, an editor and reporter for Der Tagesspiegal, notes that two weeks after Tesla announced its Metro Berlin gigafactory, Audi announced it would cut 9,500 employees by 2025. The narrative in Germany, she writes, "goes like this: Germany has failed to embrace the future. It has been complacent for too long, economically and politically, coasting on former glories. Now the world is coming for it."

Reminds me of what we said about GM, Ford, and Chrysler here in the 1980s, '90s, '00s, and '10s.

And then there's Volkswagen.

The automaker that pounded half the nails in the coffin of the diesel engine announced just before Christmas it would reach 1 million in EV production by 2023, two years ahead of schedule, with 1.5 million planned for 2025. Still no word on how automakers plan to boost demand for these EVs, but keep in mind that the VW brand might sell more than 400,000 cars and SUVs in the U.S. when the 2019 numbers are tabulated. The 1-million by '23 number refers to global sales. If total global light-vehicle sales remain steady through the next few years, this will be a bit more than the 1 percent market share all brands of EVs currently enjoy.

The first of VW's EVs, the ID 3, arrives in Europe this year for about €30,000, or roughly $33,500. Even if Tesla, Cadillac, and Ford luxury EVs sell for prices that do a better job of cutting into the cost of battery electrics, though perhaps still losing money, I believe it will be medium-priced commuter cars like the VW Golf-size ID 3 that will make electric power mainstream.

The future has come and gone for…

Car-subscription services. Except for Volvo, which lets subscribers exchange one model for another of equal value after a year, practically all the luxury brand sub services launched in the last couple of years are either gone or on hiatus. I don't see much future in car-sharing, either. And driverless Ubers and Lyfts might make some sense as taxicab alternatives when traveling to and from airports, they'll do nothing to alleviate traffic congestion. LAX will still be at least 45 minutes from anywhere in town.

This all adds up to:

Peak auto? I've already written that how peak sales in the U.S. of 17.5 million vehicles per year, first set in calendar 2015, isn't that impressive when you compare the nation's population to what it was when sales first breached 15 million (in 1978). Since then, there were four more consecutive years of 17-plus-million sales, including 2019. That makes overall U.S. auto sales more impressive, though I don't see the trend continuing through the '20s. There will not be enough young new-car buyers to replace retiring new-car buyers who will put 4,000 or 5,000 miles per year on their last new cars and trucks.

Cities are rediscovering mass transportation as a way to help alleviate traffic and allow city developers to devote less space to parking lots and garages. New York City has a plan to limit private motorized traffic in parts of Manhattan, and even Kansas City is considering a proposal to cut bus fares to zero for all commuters. Meanwhile, new cars, trucks, and SUVs, even the commodity brands, are becoming luxury items anyway, as average prices race past $35,000 and middle-class buyers increasingly take out seven-year loans.

This future may not bode well for mildly enthusiastic car buyers. More brands, including several that enthusiasts covet, will be gone by December 2029. But as Automobile founder David E. Davis Jr. once said, the absolute number of enthusiasts (not a percentage of the car-buying public) has remained the same since the early 1900s. If Peak Auto plays out this way, there may be more space on the roads for us.