It’s a truism that the world is always changing. But now the pace of global change isn’t just changing – it’s accelerating. To remain relevant and competitive in the long run, we need to prepare for a future that looks significantly different from the present. As we think about the forces that will shape global markets in the years to come, we look at many factors, including consumer trends, business risks (pdf, 6.56Mb) and other inputs into and outcomes of our materiality analysis. This analysis has reinforced our belief that profound shifts are underway that will fundamentally reshape both the markets for our products and services and the constraints under which auto manufacturers will operate in the future. One obvious driver of change is population growth: The United Nations predicts that the global population will reach 9 billion by 2050 and increase to 10.1 billion by 2100. Another is the shift in the locus of rapid economic growth from more mature markets to evolving economies in China, India, Brazil and other countries. (See Focus on Asia for insight into our growth in that region.)
These trends, along with advances in conventional and renewable energy technologies, are leading to significant shifts in energy supply and demand, several of which are highlighted in the World Energy Outlook 2012, a publication of the International Energy Agency (IEA):
Despite widespread efforts to use energy more efficiently, energy demand is projected to grow by one third by 2035 with China, India and the Middle East accounting for 60 percent of that growth. These regions will also account for most of the increase in demand for oil for transportation.
The number of passenger cars on the road is expected to double to 1.7 billion by 2035 (up from 800 million in 2011). Truck fleets will also continue to grow: Demand for fuel for freight trucks represents 40 percent of the projected increase in demand in transport fuel by 2035.
Due to increased production of natural gas and shale oil, the United States is projected to be the largest global oil producer by around 2020 and be energy-independent and a net oil exporter by about 2030.
These changes indicate a shift in the growth of energy use and corresponding greenhouse gas emissions – also from mature markets to rapidly growing ones – as well as changes in which countries and regions are importing and exporting fuel.
The IEA report also calls out some sobering predictions:
One billion people will still lack access to energy by 2030.
Water issues related to energy extraction will continue to grow as more water is needed to produce new energy supplies.
Limiting the warming of the climate to only two degrees centigrade (aligned with a concentration of 450 ppm of carbon dioxide in the atmosphere) is becoming more difficult and more costly with each year that passes.
These findings reinforce the “water-food-energy nexus” – the idea that changes to conditions affecting one of these basic human needs inevitably affects the others. (For more on this, see this year’s Water perspective.) For example, the use of fuel for transport in one region of the world can have consequences for food costs and availability in another. We are also watching related trends like urbanization, congestion and gridlock.
We believe we have taken a responsible course to plan our products based on doing our part to achieve climate stabilization. We are also developing a comprehensive water strategy that takes into account water-related risks and opportunities across our value chain. However, our reading of the IEA report and other information suggests that responsible actions related to our current products and those in the pipeline may not be sufficient to maintain future competitiveness. The trends discussed here paint a picture of future markets that are dramatically different from those of today, offering different opportunities and posing new challenges. To meet the needs of our customers and contribute to addressing the global sustainability issues of the future, we are applying our core competencies, including innovation and partnership-building, to develop solutions for future mobility that reflect the realities of a changing world.