Where’s the Best Place to Live without a Car?

For Americans who live in the suburbs, exurbs or rural areas, being able to live without a car seems like a pipedream. But elsewhere, there are situations where it may actually make some sense.

They may be vastly different in nearly every other way, but small towns and large cities share one trait – being the places where it’s more possible to live without a car.

Of course, within the larger group of small towns and larger cities there can be big differences in relative car-free attractiveness depending on differing factors.

For instance, the small county seat where I live can be walked from one side of town to the other in under 15 minutes. This means that, even if there are places where a sidewalk would be nice to have, it’s theoretically possible to take care of grocery shopping and trips to the pharmacy or the cleaners or the hardware store on foot.

Visiting restaurants, schools, the post office and other government offices is also quite easy as well.

But even slightly bigger towns pose challenges because of distances that are much greater – and there’s usually little in the way of public transport to serve inhabitants who don’t possess cars.

At the other end of the scale, large cities are typically places where it’s possible to move around without the benefit of a car – but some urban areas are more “hospitable” than others based on factors ranging from the strength of the public transit system and neighborhood safety to the climate.

Recently, real estate brokerage firm Redfin took a look at large U.S. cities (those with over 300,000 population) to come up with its listing of the 10 cities it judged the most amenable for living without a car. Redfin compiled rankings to determine which cities have the better composite “walk scores,” “transit scores” and “bike scores.”

Here’s how the Redfin Top 10 list shakes out. Topping the list is San Francisco:

  • #1: San Francisco
  • #2: New York
  • #3: Boston
  • #4: Washington, DC
  • #5: Philadelphia
  • #6: Chicago
  • #7: Minneapolis
  • #8: Miami
  • #9: Seattle
  • #10: Oakland, CA

Even within the Top 10 there are differences, of course. This chart shows how these cities do relatively better (or worse) in the three categories scored:

Redfin has also analyzed trends in residential construction in urban areas, finding that including parking spaces within residential properties is something that’s beginning to diminish – thereby making the choice of opting out of automobile ownership a more important consideration than in the past.

What about your own experience? Do you know of a particular city or town that’s particularly good in accommodating residents who don’t own cars?  Or just the opposite?  Please share your observations with other readers.

What are the short- and long-term implications of self-driving automobiles?

McKinsey’s take:  In a world where people don’t take charge of the wheel themselves … we’ll all be better off.

The Google Driverless Car
The Google Driverless Car

From Google’s fleet of driverless cars to the Mercedes-Benz Robo-Car concept, self-driving automobiles are stepping off the pages of science fiction and into real life.

But how many of us have really stopped to think about how the adoption of self-driving vehicles will change everyday life as we know it?

Consulting firm McKinsey & Co. has done so, and a recently released report predicts some pretty major changes – most of them very fine, indeed.  Here’s a sampling:

  • The number of car crashes will plummet.
  • “Drivers” will become “riders,” with more time for working, leisure and interaction with others.
  • “Dead time” in commuting will decrease, and productivity will increase as a result.
  • The ubiquity of the multi-car household will change.

And it’s not just McKinsey that is looking at self-driving cars with such optimism.

Even the normally dour and scolding National Highway Traffic Safety Administration predicts that consumer adoption of self-driving vehicles will usher in “completely new possibilities for improving highway safety, increasing environmental benefits, expanding mobility, and creating new economic opportunities for jobs and investment.”

But self-driving cars won’t overtake conventional automobiles in one fell swoop.  The McKinsey report outlines a timeline for adoption of self-driving features — and it’s pretty drawn-out.

Within the next three to five years, McKinsey anticipates that cars will self-handle highway cruising and traffic jams.

The more difficult challenges of driving in urban areas and dealing with variables like pedestrians, cyclists and so forth will be tackled over the coming 25 years.

Thus, the impact of “autonomous” technology will be limited until about 2020.  McKinsey figures that the technology will experience growing pains in the years 2020-2035 as driverless cars go more mainstream.

During this period, there will be numerous issues that will need to be resolved, with clear hub-and-spoke implications:

  • The development of comprehensive rules regarding how self-driving cars are developed, tested, approved and licensed (on an international basis)
  •  Changes in insurance practices – migrating from individual coverage to automaker policies that cover technical failures
  •  The growth of remote diagnostics and over-the-air updates
  •  The decline in importance of independent automotive repair shops
  •  The reduced need for taxi drivers and long-haul carrier jobs

The McKinsey report takes us beyond the year 2040, too, which is the point when McKinsey predicts that autonomous cars will become the primary means of transport in the United States.

The implications of this are guesstimates more than anything else, but McKinsey speculates on the following long-term effects:

Mercedes-Benz "car of the future":  Seats facing every which-way.
Mercedes-Benz “car of the future”: Seats facing every which-way.
  • Car designs will change dramatically – no more need for mirrors and pedals … and car seats will face any direction.
  • Space savings on streets, roadways and parking lots from more efficient vehicle use.
  •  Fewer cars will be needed compared to today, with one autonomous car doing the job of two conventional vehicles in the typical household. The vehicles will be more expensive but fewer of them will be needed, for net savings for consumers.

As for the economic impact, the figures are difficult to quantify as some sectors of the economy will be up and others down.  But with a projected 90% drop in car crashes, the savings in auto repair and healthcare bills alone are project to be around $180 billion.

If we accept the McKinsey report’s bottom-line findings, it seems the “brave new world” of self-driving cars can’t come soon enough.  But what are your thoughts?  Are there negative implications  or “unintended consequences” that will be part of the revolution?  Please share your perspectives here.

The Quiet Revolution in Automotive Advertising

New Car ShowroomA new milestone is set to be reached in 2014.  For the first time, digital advertising will represent over half of all ad spending in the U.S. automotive sector.

That means that TV, radio, outdoor, newspaper and other print advertising, taken together, will represent only a minority of the roughly $36 billion advertising industry, the second largest advertising category in the United States (behind general merchandise stores).

This is great news for all of us who have suffered through high-decibel radio advertising, TV ads with sophomoric production values, and “carnival barking” poster-like print ads that have been so ubiquitous in the automotive category for so many decades.

A just-released report from media research company Borrell Associates, titled 2014-2015 Automotive Advertising Outlook, notes the following key factors that have influenced the “drive towards digital” in the automotive advertising category:

•     Over the past decade, the number of franchise auto dealers has dropped by ~3,500 (18%), even as the number of new vehicles sold per dealer has grown by ~18%. Fewer-and-larger dealerships reduce marketplace clutter and the clamor for audience attention.

•     Also contributing to reduced clutter, six major car brands have disappeared from the market over the past 10 years: Hummer, Mercury, Plymouth, Pontiac, Oldsmobile and Saturn.

•    The per-vehicle cost of advertising for a new car has declined ~20%.  No it’s only about $500.

•     More than 90% of auto purchases begin with consumer online research. This change in behavior has transformed auto dealerships from acting like showrooms to being more like fulfillment centers.

•     As their “media channel,” dealerships are able to use the Internet to offer special customer deals in the form of rebates, incentives and loyalty programs. These marketing schemes now amount to ~$2,400 per vehicle sold — dwarfing the amount spent on advertising.

Automotive print advertising is declining -- thankfully.
The end of an era? Thankfully, yes.

Thanks to these major trends and developments, we’re now spared the volume and intensity of intrusive automotive advertising that was so common before.

Instead, car dealerships are ready and waiting for us when we’re in the market to purchase a new automobile by using online ads, search engine marketing, social media and other digital platforms to be easily accessible and available when we go online.

According to Borrell, nearly $300 per vehicle will be spent on online advertising this year, whereas just a little over $200 will be spent on traditional advertising.

Five years ago, online ad spending was about one third the amount of traditional advertising.

The information-rich web is also changing another aspect of the car buying experience:  It’s making the job of automotive sales easier rather than more difficult.

Here’s proof:  Only a few years ago, more than half of all car shoppers would end up not buying a vehicle.  Today, that proportion has now dropped to just 25%.

When customers come into the showroom today, they’re better informed, they know what they want to purchase, and they’re up on various the options and pricing deals.  In short, they’re ready to buy.

Fewer intrusive ads … better educated consumers … less stress on sales personnel … satisfied buyers.  It seems like a win-win for everyone, doesn’t it?

In the drive towards self-driving cars … How do we get there from here?

car crash in semi-rural marylandA few weeks ago, I was driving to work on the main two-lane state highway here in our semi-rural corner of Maryland.  It was the Friday before Labor Day weekend, so traffic was lighter than usual.  It was also a clear day, with no wet roads or fog.

In other words, a perfect day for driving.

All of a sudden, an oncoming car drifted into our lane.  In fact, it appeared as if it was purposefully targeting the vehicle about four or five car lengths in front of me.

In the inevitable collision that occurred (thankfully not completely head-on but sickening enough at 55 mph), there were injuries and ambulances … a closed road for 90 minutes … statements to the police required of myself and others … and two wrecks to be towed.

The cause of this accident had to be a case of distracted driving – perhaps reaching for a smartphone, checking a text message or some other action that took eyes off the road just long enough to cause a serious accident.

self-driving carsIt got me to thinking about recent news reports touting “self-driving” cars of the future.

Certainly in a case like this accident, self-driving features like nudging the vehicle back into the correct lane could have easily prevented this accident from ever occurring.

Self-driving vehicles seem like a very nice idea in theory, and in practice they’re not very far off — at least if the news reports are to be believed.

Nissan, Volvo, Daimler-Benz and other leading car companies are predicting that commercial models will be a common sight on the road by about 2020 … and by about 2035, a majority of cars operating will have this technology.

But in order to get there from where we are now, we’re going to have to deal with numerous challenges.  Here are a few that seem particularly nettlesome:

  • Will operators of self-driving cars require a different kind of vehicle training?
  • How will highways accommodate vehicles with and without drivers?
  • Will self-driving cars perform equally well in different road environments – ordinary roads in addition to super-highways?
  • Insurers will need to figure out who is at fault if a self-driving car crashes – the car or the driver?
  • How will automotive manufacturers ensure that cars’ onboard computers can’t be hacked?

And here’s another technology challenge:  What sort of back-end servers will be required to process the huge amounts of vehicular data … as well as secure ways for cars to communicate in real-time with the cloud and other vehicles?  (Daimler has reported that its self-driving test vehicle produces 300 gigabytes of data every hour from its stereo camera alone.)

And lest you become really anxious, don’t think very hard about the kind of data that’s being captured, chronicled and saved on each and every self-driving car’s trip – including  “where it’s been when” and “how fast it got there.”

I also wonder about the transition period when there will be a mix of self-driving cars and traditional vehicles sharing the road.

If self-driving cars “react” to other vehicles so easily, won’t it be really tempting for driver-operated vehicles to make end-runs around self-driving cars or otherwise cut them off, knowing that those cars are programmed to move out of the way to prevent a collision?

Roy Goudy, a senior engineer at Nissan, has commented that since “autonomous” cars can react more quickly to potential hazards than can cars driven by people, it will be difficult to have both on the road at the same time.

“What are the rules in that environment, and what do we do to enforce those rules?” Goudy asks.

I think the future of driving is a very intriguing subject.  Self-driving vehicles could mean far fewer traffic-related injuries and deaths … and it could bring more mobility and independence to disabled people and the elderly.

We just need to figure out a way to get there.

Remembering Roy Brown, designer of the star-crossed Edsel, one of the biggest flops in automotive history.

Roy Brown, designer of the Ford Edsel
Roy Brown, Jr., designer of the Edsel.

I remember my father, who had a 45+ year career in industrial/commercial sales and marketing, having an interesting artifact hanging on the wall of his office: a hubcap from a 1958 Ford Edsel sedan.

It was an interesting prop because it represents one of the biggest marketing flops in American automotive history … and underscores what can happen when product development efforts ignore what market research is telling them.

Recently, Roy Brown, Jr., one of the key players in the Edsel fiasco, passed away at the age of 96. As the lead designer on the product, Mr. Brown bore the brunt of blame for the “glorious failure” that was the Edsel.

Of course, that rap isn’t entirely fair; introducing a new motor car is a team effort that involves a host of people. And in the case of the Edsel, the design of the vehicle was only one of several key failures.

Consider just how many ways the Edsel ran afoul of good product development practices:

  • The car was developed based on out-of-date consumer research. The late 1950s was the beginning of changing consumer tastes in car designs:  moving away from exuberant fins and outlandish colors and towards a more refined style. By the time the Edsel became available at dealerships, consumer tastes had shifted and the country was in a recession.
  • The design of the car was controversial. Its most memorable design feature was its “horse collar” grille, unfortunately referred to by some as a toilet seat. It was different from any other car on the market — but the notoriety wasn’t positive. Some wags joked that the car’s front resemble “an Oldsmobile sucking a lemon,” while others were even less charitable, noting that the grille design was suggestive of a giant vulva.
  • Despite undertaking a highly publicized naming effort for the vehicle that ultimately reached more than 6,000 possibilities being considered, Ford rejected all of these suggestions and chose to name the car after the lone son of company’s founder. The “Edsel” – a clunker of a car name if ever there was one – did nothing to endear the buying public to the brand, seeming more like corporate nepotism taken to the extreme.

Ford predicted great things for the Edsel. The company launched a glitzy ad campaign for the automobile in 1957, touting it as a revolutionary “car of the future” and projecting first-year unit sales of more than 200,000 vehicles.

Instead, when it debuted in Ford showrooms in 1958 carrying a list price between $2,300 and $3,800, consumers were distinctly underwhelmed.

But even with disastrous first-year sales, Ford limped along with the Edsel until finally killing the brand in 1960. In all, only ~100,000 Edsels had been sold over three model years.

The total cost of the Edsel boondoggle to Ford was ~$350 million, which translates into nearly $2.8 billion in today’s dollars.

Roy Brown was the man held most responsible for the failure of the Edsel. But ever the optimist, the designer didn’t let this become the end of his career. In fact, Brown bounced back to work on successful new introductions such as the Ford Falcon and Mercury Comet. These turned out to be everything the Edsel wasn’t.

Mr. Brown didn’t disown his star-crossed child, either. In fact, he drove his own Edsel car (a stunning fire-engine red model) nearly to the end of his life — no doubt happy to know that in later years, mint-condition and restored Edsel cars were selling for upwards of $100,000 apiece. And there are highly active Edsel car clubs with members located throughout the United States and Canada.

So, maybe it’s not such a bad legacy in the end.

Car Company Conundrum: Auto Companies Try to Preserve Brand Loyalty

Big Three Automotive Manufacturers
The "Big Three" auto makers: Exactly how loyal are their customers?
Those of us “of a certain age” can remember the days of the Big Three U.S. auto makers. Each of them had a full brand lineup of vehicles designed to accompany a car owner’s pursuit of the American dream. For each step up the corporate or status ladder, there was a car perfectly suited for the event.

General Motors had its five “ascending” brands: Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac. Rival Chrysler Corporation had its five auto brands that tracked neatly with GMs: Plymouth, Dodge, DeSoto, Chrysler and Imperial.

Ford Motor was a bit different in that it had only three flagship brands – Ford, Mercury and Lincoln – but the idea was the same. Capture the consumer at the very beginning … and stay with him or her for years thereafter. When I was growing up, I can recall friends who came from a GM family, a Ford family or a Chrysler family – such was affinity and loyalty people felt for “their” car companies.

Fast-forward to today, and the picture is completely scrambled. Not only has the prestige – and market share – of the U.S. car companies plummeted in the face of strong competition from foreign-based car rivals, but the brand offerings of the Big Three [sic] have been telescoped severely.

GM is now down to three flagship car brands (Chevy, Buick and Cadillac), while Ford and Chrysler are down to two each (Ford and Lincoln … Chrysler and Dodge).

The rationale for the recent decisions to jettison brands was to gain better control over operating expenses. Moreover, the amount of true difference between some of the brands was modest at best. So the goal of the auto makers has been to retain the loyalty of buyers and shift them to the remaining brands, thereby controlling operating costs while keeping customers in the fold

How’s that working out for everyone?

Well … not exactly as planned. General Motors dropped Pontiac, Saturn and Hummer in the latest round of brand downsizing in 2009, but had hoped to keep most of the buyers of those vehicles in the GM family. Reportedly, there are ~3 million of these vehicles on the roads today. However, the Detroit News is reporting that a majority of these owners are opting for non-GM products when they’re in the market for a new vehicle – brands such as Honda, Nissan and Toyota.

In fact, statistics from auto research company J.D. Power & Associates show these sorry retention rates for GM during 2010:

 Hummer owners staying with GM: ~39%
 Pontiac owners staying with GM: ~36%
 Saturn owners staying with GM: ~26%

These figures compare to an industry-wide brand retention rate of ~48%.

The statistics on Saturn are probably the least surprising. After all, Saturn was promoted as “a new kind of car company” – presumably in stark contrast to other GM car brands as much as any rivals. It stands to reason that Saturn owners would probably find almost any other company preferable than staying with GM.

GM has certainly tried to keep its customers from straying – including offering special deals such as one-year free maintenance programs, discounts on new GM auto purchases, offers to test-drive GM cars, and special invitations and events to introduce customers to new GM dealers.

Some industry observers feel that GM miscalculated to a degree, in that the three brands dropped by the company had a measure of distinctness that is difficult to replicate in the remaining GM brands. J.D. Power’s Executive Director of U.S. Automotive Research, Steve Witten has noted, “The truth of the matter is they didn’t have many options for people to stay in the GM family. Now, there are holes.”

[It didn’t help either that some Saturn dealerships jumped the GM ship when the brand went away – taking many of their customers with them.]

What about Ford Motor’s experience in dropping the Mercury brand from its lineup? It turns out the news for them has been better. In fact, Ford has managed to hold on to ~46% of Mercury customers.

Ironically, the company has benefited from what might normally be considered a brand weakness: the Ford and Mercury lines had very little differentiation between them. Thus, it has proven easier to shift Mercury owners to Ford vehicles as an alternative.

Chrysler went through its auto brand downsizing a bit earlier … the Imperial nameplate disappeared back in the 1980s (I know: I owned one of the last models manufactured) … while the Plymouth brand bit the dust seven years prior to the 2009 economic near-meltdown.

Instead, the big news at Chrysler has been its shift from one foreign parent company (Germany’s Daimler-Benz) to another (Italy’s Fiat). For many, the jury may still be out on the long-term viability of Chrysler – the next two or three years will be the acid test.

The Automotive Comeback Story of the Year?

2010 Chrysler Town & Country Minivan
Chrysler's Town & Country minivan: On top of the charts again.
Not surprisingly, the ongoing saga of the GM bailout and subsequent re-listing of General Motors on the New York Stock Exchange was the biggest automotive news story of 2010.

But in what may be the more surprising comeback story, the Chrysler Town & County minivan is poised to regain the top spot in a segment that Chrysler once dominated, going all the way back to when the first minivan rolled off the assembly line in the early 1980s.

But in recent years, beset by organization troubles along with spirited competition from other domestic and imported automakers, Chrysler had lost its first-rank position to the Honda Odyssey while its overall share of the minivan market declined.

For December, the Town & Country’s unit sales were over 102,000, compared to the Odyssey’s ~98,000. Chrysler’s sister brand, Dodge, racked up minivan unit sales of ~89,000, the same as the Toyota Sienna. That puts Chrysler on pace to lead the minivan pack for all of 2010 and reclaim the sales crown.

It’s no secret that Chrysler considers the minivan to be one of the keys to its brand identity – and a key component of its comeback strategy. “Our goal is regaining leadership. We consider we own it and we need to regain what once belonged to us,” the Detroit News quotes Olivier Francois, head of the Chrysler brand, as saying.

[Another reason Chrysler might have lost its edge over the years in the “minivan derby” was a perception of quality issues and the way its vehicles handled. But speaking as someone whose family has driven Chrysler minivans since 1990 – and currently owns four Dodge Caravans spanning ten years’ worth of model years – we’ve never encountered any major quality issues beyond the expected maintenance requirements for vehicles we routinely run for close to 200,000 miles each.]

If a car maker is making a major push for product sales, it makes sense to place more inventory in the showrooms for consumers to buy. Significant “upgrades” to Dodge and Chrysler minivans are being introduced for 2011, and greater numbers of vehicles will be delivered to dealerships, it’s being reported.

Of course, no one believes that Chrysler’s goal to maintain the sales crown for minivans will be slam-dunk easy. Japanese automakers are introducing their own all-new minivan models in 2011.

And why not? They’re seeing an increase in consumer interest in the minivan segment just like everyone else. While no one expects sales of minivans to return to the stratospheric levels of the late 1990s, stories about the “death” of the minivan that were being published in more recent years have now completely disappeared from the newswires.

One of the interesting questions Chrysler will be facing in the coming years is whether to continue to cultivate two separate minivan nameplates or to consolidate them into one. Chrysler has tended to lavish more “design” attention on the Town & Country and more “performance” focus on the Dodge Caravan. As a result, the Town & Country is now more popular with female consumers and the Caravan more popular with men.

This “gender-focused” targeting finds its penultimate manifestation this year with the introduction of Dodge Caravan’s so-called “man-van” – a high-performance version of the Grand Caravan featuring a “macho” all-black interior with red stitching. Can’t wait for one of these show up in the auto showroom!