11/6/2017 Bob Lutz: Kiss the good times goodbye

Bob Lutz: Kiss the good times goodbye

'Everyone will have 5 years to get their car o the road or sell it for s
Bob Lutz

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11/6/2017 Bob Lutz: Kiss the good times goodbye

This article will be included in Redesigning the Industry, a five-part Automot

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future of a business in the throes of change. Part I begins in our Nov. 6 issue w
Have an opinion about this
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submit a Letter to the It saddens me to say it, but we are approaching the end of the automotive e
Editor, and we may
The auto industry is on an accelerating change curve. For hundreds of years,
publish it in print.
mover of humans and for the past 120 years it has been the automobile.
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Now we are approaching the end of the line for the automobile because trav
Why are disruptors
modules.
dangerous? They aren't
protecting a business The end state will be the fully autonomous module with no capability for the
model. You will call for it, it will arrive at your location, you'll get in, input your destin

On the freeway, it will merge seamlessly into a stream of other modules trave
speed doesn't matter. You have a blending of rail-type with individual transportation.

Then, as you approach your exit, your module will enter deceleration lanes, exit and go
to your final destination. You will be billed for the transportation. You will enter your
credit card number or your thumbprint or whatever it will be then. The module will
take o and go to its collection point, ready for the next person to call.

Most of these standardized modules will be purchased and owned by the Ubers and
Ly s and God knows what other companies that will enter the transportation business
in the future.
Bob Lutz is a form
of product develo

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A minority of individuals may elect to have personalized modules sitting at home so He also held senio
they can leave their vacation stu and the kids' soccer gear in them. They'll still want Ford, Chrysler, BM
that convenience.

The vehicles, however, will no longer be driven by humans because in 15 to 20 years at the latest human
legislated o the highways.

The tipping point will come when 20 to 30 percent of vehicles are fully autonomous. Countries will look at th
figure out that human drivers are causing 99.9 percent of the accidents.

Of course, there will be a transition period. Everyone will have five years to get their car o the road or sell it f
module.

The big fleets

CNBC recently asked me to comment on a study showing that people don't want to buy an autonomous car
scared of it. They don't trust traditional automakers, so the only autonomous car they'd buy would have to c
Only then would they trust it.

My reply was that we don't need public acceptance of autonomous vehicles at first. All we need is acceptance
FedEx, UPS, the U.S. Postal Service, utility companies, delivery services. Amazon will probably buy a slew of t
account for several million vehicles a year. Every few months they will order 100,000 low-end modules, 100,0
end. The low-cost provider that delivers the specification will get the business.

These modules won't be branded Chevrolet, Ford or Toyota. They'll be branded Uber or Ly or who-ever else

The manufacturers of the modules will be much like Nokia basically building handsets. But that's not whe
the future. The value is going to be captured by the companies with the fully autonomous fleets.
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The end of performance

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These transportation companies will be able to order modules of various sizes short ones, medium ones, l
modules. But the performance will be the same for all because nobody will be passing anybody else on the h
knell for companies such as BMW, Mercedes-Benz and Audi. That kind of performance is not going to count a

In each size vehicle, you will be able to order di erent equipment levels. There will be basic modules, and the
that will have a refrigerator, a TV and computer terminals with full connectivity. There will be no limit to what
things because drinking while driving or texting while driving will no longer be an issue.

The importance of styling will be minimized because the modules in the high-speed trains will have to be blu
minimum separation in the train. Air resistance will be minimal because the modules will just be inserted into
you get close to your exit.

The future of dealers?

Unfortunately, I think this is the demise of automotive retailing as we know it.

Think about it: A horse dealer had a stable of horses of all ages, and you would come in and get the horse tha
your old horse and take your new horse home.

Car dealers will continue to exist as a fringe business for people who want personalized modules or who buy
or reproduction Formula 3 cars. Automotive sport using the cars for fun will survive, just not on public h
country clubs such as Monticello in New York and Autobahn in Joliet, Ill. It will be the well-to-do, to the amaz
who still know how to drive and who will teach their kids how to drive. It is going to be an elitist thing, though
like public golf courses, where you sign up for a certain car and you go over and have fun for a few hours.

And like racehorse breeders, there will be manufacturers of race cars and sports cars and o -road vehicles. B

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Yes, there will be dealers for this, but they will be few and far between. People will be unable to drive the car t
will probably all be on these motorsports and o -road dude ranches. It is there where people will be able to
serviced and get it repainted. In the early days, those tracks may be relatively numerous, but they will decline

So auto retailing will be OK for the next 10, maybe 15 years as the auto companies make autonomous vehicle
manufacturer's brand and are still on the highway.

But dealerships are ultimately doomed. And I think Automotive News is doomed. Car and Driver is done; Road
facing a finite future. They'll be replaced by a magazine called Battery and Module read by the big fleets.

The era of the human-driven automobile, its repair facilities, its dealerships, the media surrounding it all w

Today's automakers?

The companies that can move downstream and get into value creation will do OK. But unless they develop s
the manufacturers of the modules, the handset providers, if you will, will have their specifications set by the
companies.

The fleets will say, "We want a module of a certain length, a certain weight and a certain range."

They will prescribe the mileage and the acceleration and take bids.

Automakers, if they are smart, may be able to adapt. General Motors sees the handwriting on the wall. It has
bought into Cruise Automation and Ly .

It doesn't want to be the handset provider. It wants to be the company that creates the value and captures th
right moves to be around when the transition occurs.

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I think probably everybody sees it coming, but no one wants to talk about it. They know they will be OK for a
providing superior technology, superior design and have good so ware for autonomous driving.

So for a while, the autonomous thing will be captured by the automobile companies. But then it's going to fl
captured by the big fleets.

This transition will be largely complete in 20 years.

I won't be around to say, "I told you so," though if I do make it to 105, I could no longer drive anyway because
my timing once again is impeccable.

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Motorpschycology > Guest 21 hours ago

Pontiac made a version of the '69 GTO that was called the Judge, after Pigmeat Markham made the phrase p[opular on Rowan & Martin's "Laugh
1 Reply Share

Calcarguy > Guest 21 hours ago

What does all of that have to do with the article?
1 Reply Share
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1 Reply Share

Brian Benstock 7 hours ago

Mr. Lutz is spot on. The governments of the world are supportive of this vision, and their financial backing of this direction will accelerate it becoming a rea
considerations, and control of a significant portion of the economy will be primary drivers of the cause. The current business model is not sustainable, and
2 Reply Share

Getreal 12 hours ago

Unfortunately senility has met Mr Lutz..
Reply Share

Madlock > Getreal 9 hours ago

So says the ostrich, the elevator operator, typesetter and every other naysayer or person whose livelihood is entrenched in the past rather than the
2 Reply Share

Smith 13 hours ago

Imagine the impact on the economy if all 250 million cars on the roads in the USA, had to be scrapped in 5 years time. Every person would loose thousan
bust. There would also be no where to put all that scrap, so the country would be on its knees very quickly. And consider this, there is no mass production
to be produced at a rate of 25 million per year, to replace every car over a 10 years period. Sales of cars in the USA right now top out at 16 to 17 million, f
manufacturers are not going to make these new modules, Bob? so you would have to build new factories capable of producing 25 million modules per yea
develop. Then FedEx and UPS and USPS will need to be convinced that they do not need their thousands of drivers any more and the unions will need to
unemployment will follow, will again cripple the country. Then every body shop, paint shop and car repair facility will be out of business because cars or m
required, so even more mass unemployment will follow and the economy continues to crash. And the autonomous vehicle businesses will hire them all, fo
creation, but a guarantee of job cuts. Thanks Bob, but I think you overlooked a few small details. I do hope CNBC had the smarts not to run with this articl
although not the first time!
Reply Share

Thom One > Smith 6 hours ago

A similar concept is decades old in Europe. Major cities like Rome have talked about not allowing motor vehicles in the city. They knew the concep
to execute it. The talked about big lots that you drive or train to, then a pod would pick you up and move you to your destination. So Lutz didn't dre
implementation.
Reply Share

Brian Benstock > Smith 7 hours ago

Consider that most vehicles are in use only 4-6% of the time. In theory less vehicles would be needed to provide transportation for the population.
1 Reply Share

Getreal > Smith 12 hours ago

Imagine the political backlash of any party that tries to take away vehicles people spent tens of thousands of dollars on. When that day happens it
communism will be taking over.
Reply Share

Thom One > Getreal 6 hours ago

We aren't thinking like the current 16-20 year olds. Most of them don't have a clue about a car, want one, or care about one. They want tran
car and they don't want to drive. I think Lutz is spot on unfortunately.
1 Reply Share

Smith 13 hours ago

WOW, this is one bitter, grumpy old man. 20 years and all cars will be obsolete, really. But he said there was no such thing as global warming, so why wou
eliminated? His story telling is great and very imaginative, but I think he is talking about a world, 50 to 75 years from now and not 5 to 10 years. I hope and
very wrong!
1 Reply Share
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py

High Country 14 hours ago

Didn't GM file bankruptcy during Bob's years
1 Reply Share

truthbeatold 17 hours ago

Politicians LOVE the idea of controlling and regulating the movement of the populace. Transportation autonomy comes at the expense of personal autono
recognition, the govt will have absolute control over where, when and if you travel.
2 Reply Share

Brian Benstock > truthbeatold 7 hours ago

This is exactly right.
Reply Share

Charlton Holmes 17 hours ago

Bob Lutz was part of the problem in every position he held. He is an idiot trying desperately to stay relevant.
2 Reply Share

AJ_HIERS 17 hours ago

Bob
Go to the front desk and tell the nurses to cut your pill in half.
4 Reply Share

Derek Finke 19 hours ago

In 2007 there was no person asking for a smartphone. Some years later no one said "I want a tablet pc". The rest is history.

Today no one is asking for such autonomous modules. Nonetheless I am convinced that people will use it. But I think the main reason will be the cost adv
and many car owners will save the money. If individual mobility is available 24/7 whereever you need it, for what reason you should own a car, which is is
average?

I do not know if we talk about 10 or 20 or more years. But I think Bob's scenario is quite realistic.
2 Reply Share

Torkijo > Derek Finke 5 hours ago

It will be interesting to see how it will become financially viable for the corporations to offer them in more rural areas though. With emission taxes e
larger cities around the world in the next 15/20 years but might be a longer timescale to role out further
1 Reply Share

Derek Finke > Torkijo 2 hours ago

I think rural areas will be the last point on the agenda of these companies. Try to compare Germany und the U.S. alone. Germany is dense
and between them there is often a lot of nothing (please do not misunderstand me in this point ;-) ). But at the end of the day rural areas are
people living there will still need their individual cars for a long time. Because it will not financially viable for a long time for fleet owners, IMH
Reply Share

Getreal > Derek Finke 12 hours ago

People will continue to buy cars for the same reason they buy clothes, homes, etc. By nature, people are selfish and they do not want to share. Th
the Hippie culture was really big on sharing and commune-style living, yet they were the first ones to buy the BMWs as status symbols in the 1980
1 Reply Share

Derek Finke > Getreal 2 hours ago

But what will all these people do, if there are no longer cars to buy? At the end of the day this is more a political matter. There are more and
t t ffi ill b b d tl t hi d d Wh th iti k bli t t tt ti th t d ( hi h h
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motor traffic will be banned or at least hindered. When these cities make public transport more attractive than today (which means cheaper
change their habits. You can watch this still today. In large cities less younger people have driver licenses, less people own cars, more peop
transportation.

But I agree that there will be people who are able to afford individual cars (or modules ;-) ).
Reply Share

Stauning > Getreal 4 hours ago

Perhaps you haven't been to a Walmart parking lot recently.

95% of the vehicles in the lot are simply "point A to point B transportation" tools.

The idea that Americans love their cars is spread by the 5% who really, really do.
1 Reply Share

Smith > Derek Finke 13 hours ago

Nothing like comparing apples and oranges, excuse the pun. Smart phones and automobiles are very different beasts and I think you might be sur
control more of our lives than they already do. I think we are talking 50 years or more, at least!
2 Reply Share

Derek Finke > Smith 2 hours ago

50 years - this sounds quite pessimistic. The CDO of Volkswagen Group believes we will use autonomous fleets within the next five years.
But there is no linear development in digitization. Instead we see an exponential one an this is difficult to understand for us humans.
Reply Share

Randy Steele 19 hours ago

Everything predicted here, sadly, is too practical not to come true. We make fun of millennials who can't work a standard gear shift. In less than 10 years o
steering wheel, if one actually is provided in their "transport module."
1 Reply Share

Doo It 19 hours ago

I don't know 1 person that wants an autonomous vehicle. We need to be able to tow and haul things too. I just can't imagine an autonomous vehicle pullin
vehicles be autonomous too?
2 Reply Share

Smith > Doo It 13 hours ago

Add to that the RV itself, which does not need to be towed. Then their are semi trucks, small trucks, midsize trucks, delivery vehicles, municipal bu
Greyhound buses, motorcycles, ATV's, NEV's and golf carts, and many many more. All of these will need to be autonomous for this ideal robotic Je
take a long, long time to convert everything.
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MattR > Doo It 19 hours ago

Bob is going too far. It seems that driverless cars will be a reality but people will buy & own them just like cars today.
1 Reply Share

Stauning 20 hours ago

Bob's dates will likely be off, but not the ultimate outcome. He's no visionary, but he is properly comprehending what others have been writing for more tha

When accidents (and human deaths) can be reduced by 90%+ and the cost of vehicle ownership is 10-20 times what it costs to use an "autonomous Ube
and drive themselves anywhere?
Reply Share

Getreal > Stauning 12 hours ago

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Get ea Stau g ou s ago

People who do not want to use a "pod" that some drunk upchucked their meal in, or people who do not want to rely on a computer to get them and
those who do not want to give up their personal freedom to travel where and where they want to go on a moment's whim, or those who do not wan
out of said pod. To think that this transportation will be 20 times less than car ownership is nave. It will be paid for with higher taxes, fees.
Reply Share

Stauning > Getreal 4 hours ago

You probably sound exactly like those on horseback and in carriages when the first automobiles were introduced.

Autonomous cars will be cheaper, safer and more (not less) convenient. Of course, there's no way to prove that except to look at how every
Something cheaper and more convenient came along.

People LOVED shopping at bookstores - especially the Mom & Pop shops.

Some said they would NEVER enter credit card info online. Some said they would NEVER buy books, shoes, clothes, groceries online.

Finally, to think that the computer monitoring that "pod" won't know that someone "upchucked" in it and immediately drive itself to the neare
(and naive).

Make no mistake, I completely understand that the future is hard to imagine. It always is when it's going to be different from today. But, Lutz
(this time) likely to be fairly accurate.
Reply Share

Brian Ritchie a day ago

They are getting their when they have everything in them like a camper trailer and they can fly not too high by a magnet flied and we can fly like a bird and
see things for ourselves .Then we are almost into Tomorrow ,next we fly to the moon and back ..Keep going we will get their ,its better then TV.
Reply Share

JamesDollinger a day ago

Bob's drinking again.
Reply Share

SafetyFirst > JamesDollinger 19 hours ago

LOL!!
Reply Share

rodney allgire a day ago

I see it coming. Not tomorrow, not next year but 25 years from now? I work on equipment today that does 10x what it did just 10 years ago. 2040 no comb
Redesigning the Industry Reply Share
A time of change for the auto industry
HugoTheImpaler a day ago
Lot of interesting assumptions. Seems we are generally heading in this overall direction but the tinfoil hat version of human drivers being outlawed (so fas
drivers will take much longer and start a little more subtle such as special zones similar to HOV lanes. More likely it will be choice based on financial and l
The entire automotive industry is/will be significantly disrupted, but there are many, may scenarios and opportunities to play out. The mandated existence
risk. Manufactures have been under risk for decades due to market & economy, changing regulations, and capitol investment requirements.
Tinfoil hat sales will not increase and the sky is not falling.
Reply Share

November 5 Rodney Cleary a day ago

No, Bob, the only thing "done" is you.
1 Reply Share

Strategies of global auto giants Robert Fahey a day ago
I th t f d t li d d A d th ' th ' t t k id Mi ht ll j i th dt i B
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I agree that performance and styling are doomed. And once they're gone, there's no more reason to take pride your car. Might as well join the pod-topia. B
about very expensive purchases that would suddenly be worthless. Could any government get away with that?
Suppliers: New dictators of Reply Share
development?
chrisgb a day ago
Bob Lutz grew up in a time when hot rodding was in its infancy. among the tricks, guys in the shed drilling out their carburetor's jets, advancing the timing
bypasses, milling the heads for higher compression. An industry sprang up to serve these young whippersnappers and hooch runners with better speed e
Dealers become mobility companies
manufacturers were producing off-the-shelf muscle cars that would start in the winter and had a warranty. Cars Were King. It was all around us. all the car
TV shows had either a theme car (Batmobile, MonkeeMobile), were about cars (My Mother The Car, Route 66, Straightaway), or at least had product plac

Home
Who will dominate the future?
can still see the huge De Soto emblem behind Groucho Marx on his show "You Bet Your Life." All the TV families had their car makes. Ward Cleaver (leav
Anderson (Father Knows Best) drove Fords, the Douglases of "My Three Sons" all drove Chevrolets. and if you want to win a bar bet, Lucy and Ricky Ric
be in puberty and adolescence. The siren song of a high revving V8 is on the last stanza
But I think that Mr Lutz is a little too pessimistic. His threshold of 30% saturation "autonominity" won't happen in America
Visionaries for several decades I think.
In1882, the Edison Illuminating Company started generating electricity in New York City. but it wasn't until 1952 that 98% of household hat it. It took seven
electricity to become universal.

Nov. 13: "Burn up that quarter mile

Just tuned my car, now she really peels
A-lookin' real tough with chrome reverse wheels
A Blue Coral wax job sure looks pretty
Nov. 20:
Gonna get my chick and make it out to Drag City"

Songwriters: Brian Douglas Wilson / Jan Berry / Roger Christian / Roger Val Christian
Drag City lyrics Sony/ATV Music Publishing LLC

Nov. 27: 1 Reply Share

Iowa H-BR a day ago

Often wrong but never in doubt!
Dec. 4: 2 Reply Share

Mr. Roboto a day ago

Bobby has finally lost it! Funny that he has spent a lifetime in the auto industry, but now that he is nearing his end, so is the industry? Right Bob, without y
about the global infrastructure cooperation required for this Sci-Fi dream of yours.
Reply Share

Cajuncarguy a day ago

Here is my take.

This autonomous vehicle push is a solution to a problem that does not exist or may be going away already. Vehicle safety has been greatly enhanced on n
braking, etc. It will take several years for this improvement to filter through the vehicle population.

Any comparison to the horse and car is wrong. The first automobiles gave Americans the freedom to go where they wanted and helped create the econom
describing is "Big Brother". In order for this to work some Big Head in the sky will who and where everyone moves. Total control. No more real autonomy.

This whole idea was started by people who want to control our lives and don't really like America the way it is. Besides there is no way on earth we can bu
this. We can't even fix potholes now. We are awash with oil and gas which will give all of us prosperity vs Lutz's plan to strangle us because of a fictional n

This is the most un American thing I have seen in my almost 70 years. Shame on Detroit
2 Reply Share

Dubble Bubble a day ago

This all so foreboding however it will come in stages and it won't be as ominous as Bob's vision makes it appear.
It will actually be good in many ways regarding efficiency and cost however there will be many people that will have a very difficult time becoming a cog in
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connectivity.
2 Reply Share

disqus_WJtzm28wRb a day ago

Ha, gotta love Bob
1 Reply Share

Smith > disqus_WJtzm28wRb 13 hours ago

Love him as you would love any stand up comedian, he is the biggest joke in the automotive industry today. It is a shame he is so senile now, he u
anymore.
1 Reply Share

disqus_WJtzm28wRb > Smith 12 hours ago

And what have you accomplished in the auto industry again?
Reply Share

JamesDollinger > disqus_WJtzm28wRb a day ago

I don't even respect him.
Reply Share

disqus_WJtzm28wRb > JamesDollinger a day ago

Thats because hes the opposite of you: smart and rational. And you dont respect what you dont understand.
1 Reply Share

Smith > disqus_WJtzm28wRb 13 hours ago

I have spent time with Bob and I can tell you that he is no longer smart and he is defiantly not rational. He is the opposite of almost e
this planet, except you of course.
1 Reply Share

disqus_WJtzm28wRb > Smith 12 hours ago

Funny, I was thinking youre the opposite of educated and intelligent based on your inane posts...
Reply Share

Peter a day ago

Well, if I hurry up and import from Germany that LHD 2005 Audi A2 1.6FSI with the White Pearl Paint and Twist Interior that I've always wanted, I'll be able
for a while.....
Reply Share

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