Sales of new cars are booming in India, China, Brazil and elsewhere in emergent markets; and the stock of cars in use is burgeoning. OEMs are rushing to build new capacity, launch new models, and ride the wave of economic growth. Yet, in this fevered atmosphere, the problems caused by older vehicles are being ignored.
In these new markets, up to 80% of new car buyers are also first-time buyers; a situation quite different to established markets where sales are essentially driven by replacement demand. This helps explain but not excuse the industry focus on new car buyers.
In the emergent markets, for many decades, new vehicle sales were scant, and much emphasis was placed on retaining vehicles in use – for as long as physically possible. There was not necessarily a requirement for vehicles in use to meet a minimum operational standard enforced by an annual test, or if there was then it was not necessarily enforced.
In the emergent markets, for many decades, new vehicle sales were scant, and much emphasis was placed on retaining vehicles in use – for as long as physically possible.
The consequence today is a rolling liability of vehicles in use whose structures, engines and functional equipment were in any case designed to meet much lower standards of earlier eras, and furthermore have deteriorated well past any notional concept of operational safety: in some cases it appears that the structural integrity of the vehicle is provided by what remains of the paint!
The significance of older vehicles in explaining the rate of deaths and injuries from road traffic incidents has not been systematically researched around the world. However, it would not be surprising to find that they are disproportionately significant.
There is an urgent need for intelligent policy in this area. This should not take the form of the scrappage incentives operated in many markets to stimulate demand during the recent global economic crisis – these schemes were deeply flawed. An alternative is to design a vehicle removal scheme based on a hierarchy of steps:
- Those vehicles that are structurally unsound;
- Those vehicles whose engines create disproportionately large toxic emissions;
- Those vehicles whose secondary passive safety systems do not comply with defined standards.
Rather than the current owners being offered discounts or incentives to purchase new vehicles, the scheme should be available to be used to purchase older (used) vehicles as well.
The significance of older vehicles in explaining the rate of deaths and injuries from road traffic incidents has not been systematically researched around the world. However, it would not be surprising to find that they are disproportionately significant.
It is probable that such measures would open up more opportunities for bribery and corruption, and that they are not as administratively simple as a vehicle removal / replacement scheme based on vehicle age. It is also true that such removals would penalise those on lower incomes who are generally the owners and users of such vehicles. On the other hand, it is these people on low incomes who are also suffering the costs in human lives and injuries when using old, decrepit vehicles.
Introducing such a policy would provide wider benefits in terms of reducing air pollution and congestion, improving average fuel economy, and providing a major economic stimulus to the automotive repair and maintenance industry. The measures would not hit new car sales, which are booming in any case. The time for action is now.
Dr Peter Wells is a Reader at Cardiff Business School, where he is a Co-Director of the Centre for Automotive Industry Research and leads the automotive industry research programme within BRASS, also in Cardiff University. Dr Wells is also a director of AutomotiveWorld.com’s sister website AWPresenter.com. He can be contacted on wellspe@cardiff.ac.uk.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
