From the invention of the motorised car in the 19th century, consumers have benefited from the increased freedom offered by the car. During the 20th century cars became a globalised commodity and rapidly adopted by households. For the question of whether motor cars are necessary, first the benefits must be assessed.
By owning one's own car, people are able to add spontaneity to their lives. A quick decision for a day trip for the family does not need to be impeded on whether the trains or buses are working that day. Households are able to experience independence and higher economic opportunities through accessing employers not previously accessible without using their own car. This has enabled higher quality of life than our ancestors experienced.
But it is not just convenience that cars offer. Cars allow others so see an implicit indication of their status in society. Drive a Lamborghini through any street and it is likely to attract more attention than their Volkswagen brother. One does not even need to see the Lamborghini but hear its turbocharged rumble to instantly register the wealth level that is attached to such a vehicle. Collecting 6-figure motor vehicles has become a staple of the well do to.
With this growing consumer demand, it is also not surprising that cars make up a large proportion of the UK economy. With over 850,000 people employed in the automotive industry, in 2018 this created 1.5 million passenger vehicles and a turnover of £82 billion. Were individuals to change their habits from owning cars to sharing them instead, they would see a reduced financial burden on themselves and environmental burden on the planet as well. However, this is likely to have a sharp hit on the employment levels in this sector in a period when UK unemployment is increasing.
The Bank of England estimates that as an effect of coronavirus, unemployment will rise to 9% in 2020. This previous high was last experienced in the UK in 1994. Coronavirus has created a challenging environment for many affected sectors. There might not be a desire on the part of consumers to drive an additional industry into turmoil at this moment in time. The awareness of knowingly being responsible for an increase in the unemployment figures might sway decisions made in the present.
Not only is it a challenging environment to be unemployed but the opportunities for retraining could be thwarted in future years. With a warning from 13 universities within the UK already stating that they are likely to need government bailout, the future of adult education is becoming even more uncertain. The 13 universities provide education to 5% of all students studying in the UK.
The government would also need to consider the effects on tax receipts were individuals to no longer own their own car. Within the UK a tax is levied annually on all motorised vehicles called vehicle excise duty. This is calculated based on the carbon dioxide emitted by the vehicle being taxed and can cost up to £2,175 per vehicle per year. This represents £6.5 billion government income each year.
With consumer uncertainty about their future in a coronavirus world, is there sufficient appetite to remove one area of guaranteed stability? If the automotive industry were significantly reduced, what can be put in place as an alternative industry? Is the price we currently pay commensurate to the benefits we receive?
Charlotte Aguilar-Millan
© The European Futures Observatory 2020
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