Cars Are Not Out Of Fashion Quite Yet

Cars Are Not Out Of Fashion Quite Yet

January 1, 2015

A December 9th report released by the American Association of State Highway and Transportation Officials and the American Public Transit Association argues that $163 billion of investment is required annually for the next six years for road development and upgrades in the US to meet transportation needs.  Representatives from 30 US state governments gathered in November to explore ways to raise the required funds.

Meanwhile, also in early December, England announced in its first ever ‘Road investment strategy’ an ambitious £15 billion plan to triple levels of spending by the end of the decade to increase the capacity and condition of England’s roads.  The government is investing in more than 100 new road programs covering the current parliament and the next, which will result in adding over 1,300 new lanes to busy roadways.

Some countries are even turning to outsiders for assistance.  In September 2013, the UAE agreed to invest up to $5 billion over 7 years in Russian roads, ports and bridges, in addition to the $13 billion committed by Putin.  A recent presidential order calls for the building of about 1.4 million km of roads in Russia over the next 10 years.

Clearly, all of these efforts are aimed at meeting the significant demand of local drivers for driving infrastructure so as to ensure the mobility and productivity of the population and economy.

According to IHS Automotive, part of IHS Inc., a global business intelligence firm, global automobile production grew by around 25 million units from 2009 to 2013 and is projected to increase by 21 million units by 2021.  The expected trend is thought to be particularly driven by demand from developing markets such as China and the reviving European automobile industry.

While personal income, lack of alternatives, oil prices, spatial dispersion and other factors certainly affect the continued growth of the automotive industry, a recent study by RAND Corporation demonstrates that a country’s car infrastructure–measured by the quantity and quality of its roads—is itself one of the top drivers of personal automobile use.

Thus, commitments by countries to build and improve the national road systems are likely to lead to increasing private car purchase and use—perhaps yet another example of the chicken-and-egg phenomenon.

At the same time, as consumers are buying cars and governments are building road infrastructure, it is getting easier to produce and distribute automobiles.

Almost every international automaker and many suppliers use 3-D printing in their product development, according to Automotive News.  For example, Toyota uses 3-D printing to assess the ergonomics, feel and response of parts.  Experts say 3-D printing also has potential for customized aftermarket parts or replacement parts in cases where the originals are no longer available.

Plus, in September 2014, the world’s first 3D printed electric car was presented at International Manufacturing Technology Show in Chicago.

With consumer demand constantly on the rise, infrastructure development a priority and technology following suit, the automotive industry is set for significant growth in the coming years.



Michael Platt

VP Strategy & Business Development

Michael, EDI's VP Strategy & Business Development, is responsible for business development and inward investment promotion for EDI’s clients. His primary tasks include targeting potential leads, business development consulting, conducting market research, writing feasibility studies and facilitating communication between companies.