Externalities of the car industry and the road to a more sustainable mobilityEsternalità nell'industria automobilistica e i possibili interventi per una mobilità più sostenibile

CHAPTER I THE ENVIRONMENTAL AND SOCIAL EXTERNALITIES OF OUR MOBILITY 1.1 The car industry: an industry in distress or transition? Coordinated production of cars is more than 100 years old. Starting in Germany and France, it came of age with the mass production techniques of Henry Ford. Vehicle volumes, efficiency, safety, features and choice have grown steadily throughout the industry's history. It is so synonymous with 20th century industrial development, and so intertwined with its twin marvels, mass production and mass consumption, that it has been called the "industry of industries." But, all is not well in the automotive world. Worldwide, average margins have fallen from 20% 1 in the 1920s to 5% now, with many companies losing money. This poor profitability performance is reflected in the industry's market capitalization: despite its huge revenues and employment, the automotive industry accounts for only 1.6% of the stock market in Europe, 2 and 0.6% in the U.S. The overall performance of the industry can be traced to overcapacity and mature markets in developed countries. In the U.S., Europe and Japan, which account for 80% of world sales, growth has been stalling for many years. But things got worse over the last two years. At the moment global automotive industry faces a double challenge: it has to invest billions of euro to shape the transition from combustion engines to alternative drive systems. But it is also heavily affected by the current economic recession and the dramatic decrease in sales. Not only the economic recession and poor margins are bothering the car industry. The most important issue is the road to more sustainable mobility. We believe that those manufactures 1 OICA Production Statistics (2007).Turnover in Automotive Industry and Economy.Retrieved 14th March 2009,from http://oica.net/category/production-statistics/2007- statistics/ 2 Y. Papatheodorou, M.Harris (2007, 27th October). The Automotive Industry: Economic Impact And Location issues. IndustryWeek online. 4