The Contested Role of Car Manufacturers

Research Paper (undergraduate) 2008 17 Pages

Economics - Industrial Economics



Unsustainable urban transport is often linked to rising car ownership, pollution by cars, congestion by cars etc. Due to the imperative of corporate social responsibility the car industry can no longer ignore this scapegoat role. In order to keep market shares high it increasingly feels urged to contribute actively to a more sustainable urban transport in the future.

Strategically, car manufacturers have two options to be better prepared for fast-moving urban environments: (a) anticipating external developments and trends in order to adjust corporate strategies (corporate foresight) and (b) participating in policy making and market transformation in order to reach corporate objectives: Shaping the environment a company lives in, i. e. participating in urban policy making and agenda setting. While the first option aims at increasing economic objectives, i.e. preparing for changing market conditions, the latter can help achieve corporate responsibility objectives if based on sustainable development principles.

Drawing on selected examples of anticipating and participating activities by the automotive industry regarding urban mobility and their respective opportunities and limits, this paper will explore how these activities, if based on sustainable development principles, can contribute to the long-term success of urban transport projects – besides strengthening a company’s market performance. Aspects like seamless mobility, mobility service provision, accessibility, and public and non-motorized mobility will play major roles in achieving these objectives.

Keywords: Sustainable urban transport, car manufacturers, corporate foresight, participation in policy making

1 Introduction – Cars and car manufacturers as scapegoats of the sustainable urban transport debate

Resource scarcity, climate change, and emerging markets’ rapid urbanisation and motorisation lately have intensified the longstanding debate about (un)sustainable urban transport. The research community widely agrees on methods and measures of sustainable transportation, but there are significant disagreements on the implementation side. [Kennedy p. 394] These disagreements are often based on ideologies, hinged on opposing ends of the (anti-)motorization debate. This paper wants to take a neutral stand, intending to free the debate from its dogmatic tones and to open it up for flexible, rationalistic solutions that can benefit opponents and proponents, private sector, public institutions and citizens alike.

To start, it should be remembered that sustainable transportation “is seen as transportation that meets mobility needs while also preserving and enhancing human and ecosystem health, economic progress, and social justice now and for the future.” 1 A newer definition reads like this: “Sustainable urban transportation involves the provision of accessibility and the generation of wealth by cost-effective and equitable means, while safeguarding health and minimizing the consumption of natural capital and emissions of pollutants.” [Kennedy, C. et al., The Four Pillars of Sustainable Urban Transportation, Transport Reviews, 25(4), pp. 393-414, 2005] According to the European Commission, a sustainable urban transport system

“… allows the basic access needs and development of individuals, companies and societies to be met safely and in a manner consistent with human and ecosystem health, and promotes equity within and between generations;

“… is affordable, operates efficiently, offers choice of transport mode, and supports a vibrant economy, and regional development;

“… limits emissions and waste within the planet's ability to absorb them, uses renewable resources at or below their rates of generation, and, uses non-renewable resources at or below the rates of development of renewable substitutes and minimises the use of land and the generation of noise.” 2 These and other definitions highlight the triangle of economical, social, and ecological development in sustainable urban transportation.

Consequently, international transport research widely agrees on the following mix of measures to reach these goals: “The sustainable mobility approach requires actions to reduce the need to travel (less trips), to encourage modal shift, to reduce trip lengths and to encourage greater efficiency in the transport system.” 3 The challenge is to work out solutions that address the triangle of sustainable development in a balanced manner. Often, conflictive interests and a lack of knowledge lead to a neglection of one or two aspects of the triangle. Therefore, governance aspects are major considerations when building a sustainable urban transportation system. [Kennedy pp. 396 ff.]

Altogether, principles of sustainable transport aim at achieving higher levels of mobility and access with less traffic. 4 This claim is based on the insight that mobility and access are desired outcomes of urban development but traffic, especially the kind generated by cars and other motorised vehicles, jeopardises long-term sustainable development 5 by causing a wide range of problems:

Table 1: Problems in cities related to cars 6, 7

illustration not visible in this excerpt

The complexity of these problems calls for the integration of transport policy, land-use planning [Kennedy p. 395] and technical improvements at the vehicle. This strategy allows a non-biased, non-dogmatic planning approach which is mode and technology neutral and therefore goal-oriented. It makes possible to fulfil the claim “not to prohibit the use of the car [but] to design cities of such quality and at a suitable scale that people would not need to have a car.” 8 Yet, achieving sustainable mobility in cities will and cannot rely on optimizing urban structures, car alternatives (pull measures) or vehicle technology (efficiency measures and regulation) alone. Rather, there is wide agreement on the necessity to combine push and pull measures because experience has shown that vehicle owners rarely change travel behaviour and leave their cars unless there are significant disincentives to use a car. This insights adds demand management measures to the sustainable transport policy agenda, either by internalizing externalized costs caused by motorized traffic or winning back urban space to the “people” or other modes of traffic (push measures). 9 [Kennedy]

The most recent decline in oil resources accompanied by a price hike has fostered the debate about alternative fuels and drivetrains for motorised transport anew. Currently, car companies are competing for the pole position in battery electric vehicle product launch to be the first on the road to post-fossile mobility. Despite these efforts, their main attention still lies on the development of conventional combustion engines because they will make up the more part of the drivetrains for the decade to come, regardless of further price increases or expected production cut backs on oil resources. Manufacturers are also continually expanding their “eco” labels quantitatively (applying to a wider range of models) and qualitatively (regarding more aspects of the product cycle), accompanied by long-term, sophisticated communication strategies. 10 Unfortunately, in the past, gains in vehicle efficiency have been overcompensated by the growth in absolute vehicle kilometres travelled and by higher demands for comfort, speed, and vehicle sizes. 11

Yet, even zero-emission vehicles will ease only a few of the above mentioned burdens of the automobile society. They will not reduce congestion levels, land use, accident rates, infrastructure costs, or the loss of “urbanity”. 12 Historically, „Growth in wealth and car use was simultaneous in cities when car ownership was at a relatively low level, but growth in car use peaked at a certain optimum, and after that point further growth in car use was detrimental to a city's economic development.“ 13 It becomes obvious that sustainable urban transport will require a mix of land-use planning, transport policy and technical measures that can cope with the complexity of the urban mobility challenge and overcome seemingly inevitable development patterns like the widely mentioned parallel growth of incomes and vehicle ownership. [Kenworthy/Laube: The Ten Myths of Automobile Dependence]

Undisputedly, individual mobility will always stay a desired element of modern life and motorised individual mobility a necessity in certain situations and geographical contexts; therefore, the car will not and cannot be eliminated from the urban (and even less the rural) sphere. Yet, “there is an increasing willingness to deal with the adverse impacts of mobility while acknowledging its benefits” 14 which means, among others, to control the unrestrained growth of car ownership and land consumption by roads. This paper will explore briefly how car manufacturers – who are currently showing efforts mainly on the technical side – can show this willingness, too, by setting trends and shaping policies instead of merely following them and thus escape their scapegoat role in the sustainable urban transportation debate.

Regardless of planners’ and researchers’ vows not to damn or eliminate the car completely from the urban landscape cars for a long time had to assume a scapegoat role in various arenas of discourse. Along with the Corporate Social Responsibility (CSR) debate, which puts businesses’ ethical, social, and environmental performance into focus, the public increasingly directs its attention on the untapped potentials of car manufacturers’ responsibilities to advance the sustainable mobility paradigm – beyond mere product innovation measures. 15 The sustainable transportation debate wants car manufacturers to become true mobility service providers and to include aspects like seamless mobility, accessibility, and public and non-motorized transport modes in their portfolios.

2 Setting trends and shaping policies: strategies of OEMs to escape the scapegoat role

Traditionally, the role of car manufacturers in urban transportation planning has been a marginal one. As two independent systems – the planning sphere and the car manufacturing and selling sphere – they had only few if any points of interaction. During the last decades though, the amount of interaction has grown as emerging demand management measures and other regulations in urban transport forced vehicle manufacturers and owners to adhere to standards (fuel/emission standards), limits (speed limit zones, bans on vehicles) or financing measures (toll roads, congestion charging zones). For example, after the first road pricing system in Europe was successfully introduced in Bergen/Norway in 1985, other European cities followed, among them large ones like London or Stockholm – with similar levels of success. Currently, 14 % of European cities are proceeding in planning a congestion charging system, and about 60 % are considering one. 16 Likewise, increased environmental awareness has become an importantfactor in the vehicle purchase process and has made car manufacturers a central target of public attention, at least in the OECD markets. While adherence to laws and regulations is a minimum requirement for public acceptance and technological innovation for competitiveness, long-term success is only possible with a pro-active approach of setting trends and, if possible, shaping policies. Experience shows that the former approach – technological innovation and compliance – is not sufficient to free car manufacturers from their scapegoat role in urban transport development. The latter approach though – pro-active participation and foresight – has the power to inherently change the way the public, i. e. political bodies, customers, stakeholders, looks at cars and car manufacturers and thus significantly boost their economic performance.

The paper will now take a closer look at two strategies, foresight and participation, that car manufacturers can espouse in order to play a more pro-active role in future development of urban transport. As has been stated above, product innovation and technological advances are considered essential but insufficient for sustainable business development and are therefore not related to in detail in this paper.

2.1 Strategic Foresight

“The objective of foresight is to identify opportunities for science and technology to address challenges facing society.” 17 This general description of the function of foresight can be turned into: “The objective of corporate foresight is to identify opportunities for corporate research, development and innovation to address challenges facing society.” Therefore, any research and development by companies should not only serve their own economic interests and satisfy customers but try to benefit a wider range of society and its problems. This is well examplified by fuel consumption reductions which do not only benefit the car owners because they save on fuel costs but also society as oil resources are conserved and pollution (locally and globally) is reduced. The challenge is to address also some problems that traditionally do not lie within the range of corporate objectives. Since the overall objective of sustainable development is achieving and retaining a high quality of life, in this case of urban life, more aspects than just environmental soundness of vehicles need to be addressed by car manufacturers.

Even though the future cannot be predicted – only possible and probable future scenarios can be drawn – and even though it is not clear „to what extent […] further development is shaped by self propelling mega-trends on the one hand and by planned interferences on the other” many future researchers and strategic planners are convinced that the future “can significantly be influenced” and “consciously be directed.“ 18 It has to be consented though that due to the fast dynamics of change it becomes increasingly difficult to assess even the near future. This challenge makes it even more important for dynamic business sectors like the automotive industry to analyze outside developments thoroughly and continually as well as to set own trends.


1 Deakin, E., Sustainable Development and Sustainable Transportation. Strategies for Economic Prosperity, Environmental Quality, and Equity. Working Paper. University of California, Department of City and Regional Planning and UC Transportation Center: Berkeley., p. 6, 2001

2 EU Commission Joint Expert Group on Transport & Environment

3 Banister, D., The sustainable mobility paradigm. Transport Policy, 15 (March), p. 75, 2008

4 Bertolini, L., Le Clerq, F. & Straatemeier, T. Urban transportation planning in transition, Transport Policy, 15(3), pp. 69–72, 2008

5 Turton, H., Sustainable global automobile transport in the 21st century. An integrated scenario analysis. Technological Forecasting & Social Change, 73, pp. 607–629, 2006

6 Worldwatch Institute: State of the World 2007. Our urban future. A Worldwatch Institute report on progress toward a sustainable society, Earthscan: Washington, p. 73, 2007.

7 Gudmundsson, H. & Höjer, M., Sustainable development principles and their implications for transport, Ecological Economics, 19, p. 279, 1996

8 Banister, D., The sustainable mobility paradigm. Transport Policy, 15 (March), (pp. 74-75) 2008

9 Deakin, E., Sustainable Development and Sustainable Transportation. Strategies for Economic Prosperity, Environmental Quality, and Equity. Working Paper. University of California, Department of City and Regional Planning and UC Transportation Center: Berkeley., p. 6, 2001; OECD Environmental Outlook to 2030, Paris: OECD, pp. 341f., 2008.

10 imug – Beratungsgesellschaft für sozial-ökologische Innovationen: Produktbezogene Umweltziele und Strategien: Wettbewerbsanalyse 2007

11 Borken, J. & Fleischer, T., Zukunftsfähige Verkehrspolitik. Ansätze für den Personenverkehr, Technikfolgenabschätzung, 15(3), pp. 4–11, 2006; Tully, C., Leben in mobilen Welten, Aus Politik und Zeitgeschichte, 29-30, pp. 33–38 (35), 2007

12 Canzler, W. & Knie, A., Demographie und Verkehrspolitik, Aus Politik und Zeitgeschichte, 29-30, pp. 9-14(12), 2007; Nuhn, H. & Hesse, M.,: Verkehrsgeographie. Paderborn: UTB Schöningh, p.193, 2006; Kenworthy, J., Traffic 2042 – a more global perspective, Transport Policy, 9, pp. 11-15, 2002

13 Townsend, C., In Whose Interest? A Critical Approach to Southeast Asia’s Urban Transport Dynamics, Doctorate Thesis, Murdoch University, Institute For Sustainability & Technology Policy: Perth/Australia, p. 45, 2003.

14 Bertolini, L., Le Clerq, F. & Straatemeier, T. Urban transportation planning in transition, Transport Policy, 15(3), pp. 69–72, 2008

15 World Business Council on Sustainable Development (ed.), Mobility for Development, Paris: WBCSD, to be published 2008

16 Deloitte (ed.), Congestion Charging – a Success Story, Deloitte: London, 2003

17 Lyons, G. & Ury, J., Foresight: the place of social science in examining the future of transport, UK Department of Innovation, University and Skills/Government Office for Science: London, p. 3, 2007

18 Topp, H., Traffic 2042 – A mosaic of a vision, Transport Policy, 9, pp. 1-7, 2002


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Title: The Contested Role of Car Manufacturers