By on May 12, 2020

As assembly plants cautiously fire up and buyers slowly return to the new vehicle market in North America, automakers have their fingers crossed, hoping that an increase in demand from frightened first-time buyers will offset lost sales from both the newly jobless and hard-hit rental agencies.

Data out of Europe and China seems to suggest the fright factor is real, but just how much (and for how long) automakers can depend on it really depends on the virus itself.

If the virus dies off, or if a fantastic new vaccine or sure-thing treatment comes along, we’re back to normal. However, if predictions by epidemiologists pan out, we’ll be in the grip of this pandemic for some time. Taking public transit will, for some, hold all the appeal of stripping naked and running blindfolded through a barbed wire factory.

In Germany, a country that held the virus at bay far better than some of its neighbors, certain companies are forbidding employees from taking transit to work, Bloomberg reports. In France, Patrick Pouyanne, CEO of French oil giant Total, sees a resurgence in the popularity of driving as a remedy for the current oil glut and a way to boost demand (and prices).

Like Pouyanne, Josu Jon Imaz, head of Spanish oil company Repsol, also anticipates increased fuel demand from drivers in the coming months and a corresponding drop in public transit use.

The hypothesis that many people will do everything in their power to avoid sharing enclosed spaces with strangers is backed only by circumstantial evidence in the West, given that lockdown orders in Europe and North America are only just beginning to ease. It will take months of “returning to normal” before solid proof rolls in. Still, Apple Maps driving-direction queries suggest a significant decrease in transit use when compared to driving — Berlin, for example, recently showed transit ridership down 61 percent, with driving down only 28 percent. Madrid, Spain showed transit use down a steady 87 percent, with driving rising to 68 percent below normal levels.

Data from Ottawa, Canada shows transit ridership down 80 percent, same as a month ago, with driving down only 40 percent — a 20-percent increase from a month prior.

In the viral epicenter of China, which saw lockdowns starting in mid-January and was first to roll them back, firmer evidence can be found.

Data amassed by BloombergNEF shows that traffic levels in the megacities of Beijing, Shanghai, and Guangzhou are now higher than levels seen last year. In comparison, volume on the three cities’ metro systems has fallen 53, 29, and 39 percent, respectively. These cities are back to work in earnest, and the divide between personal car use and transit volume can’t be ignored.

The arrival of summer and the ongoing easing of lockdown orders should add wind to automakers’ sales, and perhaps give rental agencies who really push their sterilization efforts a boost. In no way, however, does anyone expect a resurgence in the love of car commuting to make up for the loss of so many new vehicle sales during the March-May period.

[Image: F11photo/Shutterstock]

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44 Comments on “Death Train vs Safe Car Sales Hypothesis Gains New Evidence...”


  • avatar
    Steve203

    Thing is, cities with really robust public transit systems, like NYC, don’t have any place for people to put their cars while at work.

    In other cities, like Detroit, the cost of insuring a car is so high that people ride public transit because they can’t afford a car.

    My take is the car and oil company execs are trying to spin the situation, but reality is, for a lot of people, a private car is not a viable alternative.

    • 0 avatar
      Lorenzo

      For a lot of people – in densely-populated big cities – a private car is not a viable alternative. Everywhere else, driving is often a better alternative because the mass transit isn’t as effective where the density is less, or the city is more spread out.

      Mass transit works in Boston, with 700,000 people packed into 40 square miles, but San Diego, with twice the population, is spread over 315 square miles, with the northern and southern city limits 34 miles apart as the crow flies. Driving distance is 48 miles between those points.

  • avatar
    tallguy130

    So this theory assumes that most public transportation riders able, financially or otherwise, to just run out and buy a car? Also able to manage parking, insurance and all the other fun stuff that comes with it?

    I would think if your primarily dependent on public transit it’s because of cost or convenience making car ownership prohibitive.

    • 0 avatar
      Steve203

      >>So this theory assumes that most public transportation riders able, financially or otherwise, to just run out and buy a car? Also able to manage parking, insurance and all the other fun stuff that comes with it?<<

      With all due respect to the contributors of this page, I have seen several articles trying very hard to put a bullish spin on everything. It's all very reminiscent of the "better than expected" and "green shoots" spin I saw applied to really dreadful numbers a dozen years ago.

      • 0 avatar
        geozinger

        @Steve, it may be the perspective. If you don’t live/commute in densely packed cities, or if you have a relatively easy or short commute, this would seem like a logical solution.

        • 0 avatar
          Steve203

          >>@Steve, it may be the perspective. <<

          George, I'm not sure what you are referring to, my slight jab at the way some recent articles have been spun to make a bull case for automakers?

          On the news wire this morning: VW is cutting production rates at Wolfsburg, due to lack of demand for new cars.

          • 0 avatar
            geozinger

            Steve, I was really addressing the assumed ease of switching transportation modes. If you’ve never had long commutes, or used public transportation frequently, some might assume that you could switch from one to the other with relative ease.

            I imagine there’s some bull on here, regardless…

            As for Wolfsburg: it makes sense. I think we’re going to see a lot more of this kind of thing.

    • 0 avatar
      Flipper35

      My brother in law took the train in to work in Chicago every day for the convenience of not having to drive downtown. It can be a huge hassle to find parking every day in a big city but if they still lived there I bet he would be driving in these days.

      • 0 avatar

        Yeah It depends on where your talking about. Here in Connecticut most transit is driven by people who can’t afford (or for a variety of other reasons) can’t drive, or by people where it’s more convenient to avoid traffic or find parking. Lots of those in the 2nd category can pretty easily start driving if commuting into New Haven or Hartford (commuting in to NYC is a different matter.

  • avatar
    Kendahl

    The top factor in risk from the virus is age. Most deaths are to those over 65.

    The next factor, which no one seems to talk about, is high population density and communal living. Consider life in a nursing home. Residents have minimal personal space. Even that may not have an independent heating / air conditioning system. All other spaces are communal. If you go anywhere, it’s in a van or bus with other residents. If one resident contracts a communicable disease, everyone is exposed.

    Right now, the safest way to live is by yourself, in your own detached house on your own lot. If you still have a job, do as much as possible online rather than in person. Shop online as much as possible. When that’s not possible, stock up for as long as possible in one trip. When you must leave home, use your own vehicle rather than public transportation. Socialize online rather than in person. Being a hermit has survival value.

    • 0 avatar
      Luke42

      You’re forgetting that poverty (and the related health problems) are also big risk factors.

      Also, many poor people here in the US avoid medical treatment because they like not being bankrupted — so nature will take its course here, which is obviously a bad thing.

    • 0 avatar
      tomLU86

      Suburbia depends on relatively cheap, affordable fuel to survive. Perhaps electric cars will mitigate that. I’m not sure fuel (which was relatively cheap and affordable BEFORE the price dropped due to COVID) will stay that way.

      To enable the suburban, modern lifestyle, society has become more “efficient” and “optimized”. Redundancy is the enemy of efficiency. Low cost rules!

      That’s why the almighty USA does not have a single facility that produces Vitamin C pills or penicillin; why (according to some news accounts) hospitals don’t have masks and gowns, and why the US can’t make it’s own. China makes the stuff–aka, Chinese are willing to work for slave wages, because for them, those are living wages, and make these things for us.

      That’s why here on TTAC, a new vehicle offers so many more ‘features’ per inflation-adjusted dollar than 30 years ago–because workers in poor countries make them. And by not paying Americans or Canadians “too much” for plastic trim and wire harnesses, we save money. As to the displaced employees–must of them have slid backward economically, or are living off past wealth they created or inherited. Tant pis….

      But nature likes redundancy. Commercial aircraft have redundant systems (because failure at 30,000 feet is not an option).

      Logically, I am now more inclined to agree with those who feel that the world’s governments overreacted to COVID-19, and in so doing have destroyed the world’s economies for the next several years, with yet unforeseen consequences. While it’s possible that if they had not reacted, we would have an even greater debacle than current, would the premature death of mostly senior citizens (the US average life expectancy is 78; the average COVID death in Michigan is 73.6 and the median is 76) have impacted society as much? How many more suicides will we have in the upcoming depression?

      People are not Ameritrade accounts, where a few clicks can reallocate your funds. They can’t easily relocate, or even change their practices. In cities, parking is hard to find, and traffic is difficult–even more so with the delusion of bike lanes. Working at home full-time is viable for some. But currently, many people working at home who normally do not, are goofing off more. And employers will find ways to prune jobs in the wake of this.

      But that’s good, you say. “More efficient”. Yes. Perhaps. And to whom will the benefits of this efficiency accrue? The customer? Ha-ha, LOL. What will the redundant, now jobless worker do? Get public assistance to barely survive? Where will those resources come from?

      In the our future, poorer world, one thing government might consider, harsh as it may sound, is less regulation. If it affects others, regulate it. If not, let it go.

      By that logic, emissions regulations are essential. Safety regs are not. Jack drives his ICE car, we all breath the exhaust. But safety is not. Jill wants a 5-star crash rating, good for her–let her buy a CUV tank. But Jeff is the working stiff, in suburbia, who needs a car to drive to his job tending to Jill by cutting her lawn or fixing her house or cleaning her clothes. Should his choice be a 10 or 20 year old used car? Or should he be allowed to drive a relatively new, basic car, more reliable and affordable vehicle without 20 airbags and a 5-star rating? I think he should. Some Chinese “entrepreneur” (or Western capital using Chinese labor) will make a car that is relatively clean and efficient. Or, maybe GM or Ford will…gasp! If Jeff is in an accident, well, he paid less up front and may pay more now. But if not, he’s saved scarce money, and the car allows him a reliable way to go to work. The odds are he won’t be in an accident.

      COVID may induce a brief, short term spurt in purchases by people who rediscover the benefits of commuting alone, but only a few can do so. It won’t make up for the loss of sales (in the US) due to economic setback. Remember, there are 85 million cars and trucks 5-yrs old or less on the roads. Plenty of them coming off lease. Plenty more will be repossessed. They will further depress a depressed market. Now I regret writing all this…

      • 0 avatar
        geozinger

        Well put, tom. I feel the same way you do in your post.

        Many of us who choose to daily older vehicles are already dealing with the safety vs. injury gambit. I daily a 16 year old minivan as my commute is relatively short on surface streets, but the utility of the van for other needs is why I do it. It’s far more economical compared to buying a much newer vehicle for my 8K-10K miles of driving per year.

        I suspect in the coming months we will be faced with making many other trade-offs, also. Hope to see everyone on the other side.

      • 0 avatar
        Arthur Dailey

        @Tom; While I disagree with some of what you posted I do appreciate the thought that you put into your posting. The major flaw is that if someone is injured or killed in a motor vehicle collision it does impact many, many others.

        What if they require long term medical or healthcare? What if they do not have adequate coverage and therefore the cost comes from the public purse? What if they leave behind children who therefore may become dependent on state care? Or if they doom their survivors to lives of poverty?

        As in industrial accidents the injury is only the tip of the iceberg.

      • 0 avatar
        Lou_BC

        @tomLU86 – It is refreshing to see such a well thought out post. You astutely point out that “offshoring” indirectly has a benefit but at the sacrifice of redundancy and dependence. That does tend to improve one’s standard of living if you are middle class but does push the low end of society down even further.

        I do not believe that relaxing safety measures is the place to reduce costs. There are healthcare and societal costs associated with death or crippling.

      • 0 avatar
        thelaine

        “Logically, I am now more inclined to agree with those who feel that the world’s governments overreacted to COVID-19, and in so doing have destroyed the world’s economies for the next several years, with yet unforeseen consequences. While it’s possible that if they had not reacted, we would have an even greater debacle than current, would the premature death of mostly senior citizens (the US average life expectancy is 78; the average COVID death in Michigan is 73.6 and the median is 76) have impacted society as much? How many more suicides will we have in the upcoming depression?”

        Very well stated. This is this exactly the rational cost/benefit analysis that should have been done.

        Many still downplay the cost these economic lockdown policies, as they focus on the virus. Tens of millions of lives have been shattered, in the US alone. Worldwide, it is a catastrophe, particularly for children. I think we are unlikely to repeat this experiment. In the future you will see the implementation of a response targeted to the threat.

        • 0 avatar
          Lou_BC

          “This is this exactly the rational cost/benefit analysis that should have been done.”

          @theloon – hard to sound credible when you can’t get your spelling and syntax correct.

          Death versus cost/benefit……

          Those with moral and ethical inclinations would not look at it so simplistically.

          “Dr. Johan Giesecke, the former chief scientist at the European Centre for Disease Prevention and Control who is currently advising the Swedish government, said in a recent interview, “only in a year from now can we know if the Swedish approach has been proven right.”

          The strategy relies on deeply engrained social practices and voluntary behavioural changes to flatten the curve over the long term.

          Swedish public health officials have consistently denied their objective is to achieve herd immunity or to protect the economy.

          They are simply betting that a long-term voluntary mitigation strategy will yield better public health outcomes than a short-term coercive containment one.”

          • 0 avatar
            thelaine

            A poor English teacher you are.

          • 0 avatar
            Lou_BC

            @theloon – “A poor English teacher you are.”

            You sound like Yoda but without any wisdom.

          • 0 avatar
            thelaine

            Sorry Karen. Better next time I will do.

          • 0 avatar
            thelaine

            PA has had less than 4,000 COVID deaths. 70 percent have been in nursing homes after the governor ordered them to take COVID patients. That leaves about a 1,000 non-nursing home deaths, or .008 percent of the population. PA just extended the lockdown into June. Insanity.

  • avatar
    Lie2me

    I think a lot of commuters already have a car, but choose public transportation because it’s cheaper and less hassle. Chicago and New York are the only two cities that you can reasonably go your whole life without owning a car

  • avatar
    golden2husky

    I took transit to NYC for a decade, then I got a company car and commuted to NYC for 12 years. I relinquished the car and went back to transit because the commute home was ruining my health, both physical and mental. Imagine driving 43 miles one way and taking 2 hours to do so…3000 times…While all roads to big cities are now mostly empty, what do you think will happen when the economy opens up? I’m willing to bet that most commuters like me have cars now, and if a significant number of those transit riders hit the roads, the traffic will be unbearable.

    If anything good comes out of this pandemic, it will be the idea that people can telework instead of schlepping to an office every day. We are exploring that option for when we return to work – much easier to distance without being jammed in a sea of packed cubicles…damn I miss having an office to myself.

    • 0 avatar
      Lie2me

      This is probably my biggest surprise. I didn’t realize so many companies were still resistant to employees working from home. I would have thought that if anything it saves companies a lot of overhead not having to provide a place for them to work

    • 0 avatar
      Kendahl

      I met a guy who worked at my employer’s corporate headquarters in NYC. His commute from Connecticut by bus and train took three hours each way. Moving to New Jersey saved him half an hour each way. He spent almost as much time commuting as working.

      I worked in the company facility in Omaha, Nebraska. My wife had a day job and played in the local symphony orchestra. When we were house hunting, one of the criteria was that she be able to leave work at 5 pm, come home for supper and make it to rehearsal at 7 pm.

      Employers resist telework because the managers don’t feel in control of their subordinates.

      • 0 avatar
        golden2husky

        I can’t even begin to tell you the value of being close to work if you have to go to an office. Alas, I bought my home before the change in employment.

        Re Telework – my brother is a bigwig at a global insurance company. Even thought remote work was used prior, they have greatly expanded telework since the pandemic. Reduction in productivity: Zero. If anything, a slight improvement. Add Zoom, Teams, and other networking tools and you can cover a lot. Not everything, but a lot.

    • 0 avatar
      geozinger

      @golden: I had a similar commute when living in Atlanta in the 90’s. I lived by the airport and commuted to the northern suburbs. Mine was 38 miles door to door. Like you said, a minimum of 2 hours a day in the car.

      When I left ATL for a medium sized city in the midwest, little made me happier than my 20 minute commutes twice a day. I felt like there were so many more hours in the day…

  • avatar
    Arthur Dailey

    I believe that a permanent increase in telecommuting will be a result of the pandemic. Unfortunately also probably a flattening of organizational structures and even leaner staffing

    Going out farther on a limb, perhaps a return to the suburban detached home with a yard and picket fence. Can’t imagine trying to raise a family under the current circumstances, in a high rise urban condo.

    Even as a long term proponent of mass transit, I can fully understand any reluctance to return to using it. So I believe that sales of used and low priced vehicles will boom as we return to the new normal.

    • 0 avatar
      Lie2me

      I’ve mentioned this before, the suburbs that have lost their luster over the past few decades will suddenly see a renaissance with their already built-in social distancing along with the private car for most of their transportation needs

      • 0 avatar
        Luke42

        The suburbs need some changes in order to regain their appeal.

        My neighborhood really needs a coffee shop, for instance, but I don’t have the money to build one and to get an easement on the zoning rules.

        My in-laws live in a McMansion where none of the houses have sidewalks, much less a place worth walking to. The last time I went jogging there, I had to dive into the ditch to avoid being run over by the Fedex guy. Not an attractive place to live, despite the “nice” houses. This can be fixed, but it’s not free and the current residents of the neighborhood have no interest in doing so.

    • 0 avatar

      “Unfortunately also probably a flattening of organizational structures and even leaner staffing

      Why it is unfortunate? Just opposite – it increases productivity. The goal is to make office fully automated and hire only experts in certain fields. The rest of population who do not have desirable skills can live in Matrix.

      • 0 avatar
        Luke42

        Having a big part of the population live in “the matrix” basically requires the UBI.

        • 0 avatar

          Do not worry, de facto UBI is already started thanks to virus. Supported by Republicans. And democrats ask for even more hand outs. So there will be UBI. Automated economy with few human experts will make productivity so high that prices will go dramatically lower. Staff will be almost free so UBI will be workable solution. People will be paid to not bother and have fun. Want virtual reality – you get it free for the rest of your life.

  • avatar
    -Nate

    We’ll see how this turns out .

    In the 1960’s and 1970’s many Americans bought tiny little scooters and Motos to commute on, even in the East where the winters are brutal .

    I’m glad I retired so I no longer have to commute .

    -Nate

  • avatar

    Oil prices will go up and Europe and Asia will go back to normal, i.e. riding public transportation. It is clean well organized and convenient, why bother with personal car? Asians were using masks for as long as I can remember and eagerly follow all instructions. In America the public transportation is the refuge for homeless and all kind of crazy people. I avoid it if I can regardless of virus.

  • avatar
    -Nate

    For a short time in about 1963 I more or less lived in the Boston MTA subways, boy howdy was it ever nasty ~ you’d be lucky if they ever took out the trash, forget about cleaning up anything .

    The subway, trolleys and buses in Los Angeles are some of the cleanest I’ve ever ridden, still jam packed with crazies, druggies and sexual predators though .

    When I’m vacationing I often take the local bus to see the town and get a feel for it .

    -Nate

    • 0 avatar
      Lie2me

      Public transportation is a good way to immerse yourself in a foreign culture, but right now I just as soon not immerse myself in foreign viruses

      • 0 avatar
        Lou_BC

        “foreign viruses”

        Virus’s don’t recognize borders, flags, ethnicity, or socioeconomic status.

        Any virus or bacteria entering our bodies that is not our own “flora and fauna” is by definition foreign.

        SARS-CoV-2 is foreign to our bodies and foreign to our species since it is novel aka new to us.

        • 0 avatar
          Lie2me

          “Any virus or bacteria entering our bodies that is not our own “flora and fauna” is by definition foreign. ”

          Seriously, Lou, that’s exactly what I meant. I’m well aware that viruses know no borders

  • avatar
    Jeff S

    I have been teleworking off and on for over 20 years. Since 2001 I live about 16 miles from downtown Cincinnati and up until 2 months ago I was required to go into the office once a week–I haven’t been in the office for about 2 months now due to the Covid-19. Before I moved closer I lived in the country which required me to drive 30 miles to work each day (60 miles round trip). I would put at least 15k miles a year on each vehicle and now I am lucky to drive 3k miles a year and now since Covid-19 even less. Not that interested in buying a new vehicle especially since my highest mileage vehicle has 49k miles and is 8 years old. I have a 2013 CRV with 23k miles and a 2008 Isuzu I-370 with 31k miles. I get much more work done at home and spend less time having to commute and dress for work. I have not only saved money on vehicles but have saved money on food, clothing, and other items that I normally spend on. I believe telework will be expanded especially when most employers discover the savings on less office space and more productivity. My employer has reduced their office space to a quarter of what it was saving about 3 million a year in costs.

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