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What the future of the auto industry will look like

Surging demand for cars in rapidly growing nations will mean a robust car industry in 20 years. The US will have a piece of it – though smaller than today – and the models it turns out will be much greener as the iconic industry reinvents itself.

By Staff Writer for The Christian Science Monitor, Staff Writer for The Christian Science Monitor / July 2, 2009

Aptera, a small southern California start-up, has created the all-electric 2e. The aerodynamics of the two-seater are intended to make it ‘glide’ through the wind rather than push it.

Courtesy of Aptera

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Washington; and Anderson, Ind.

John Waters is leaning against a vehicle that looks like a delivery van as imagined by Pixar Animation. The IDEA – that’s its name – is blocky, yet curved, with wheel skirts and a little upswoop at the back that adds attitude. You can almost hear it speaking in a chirpy cartoon voice.

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Inside IDEA’s silver sheet metal is plug-in hybrid technology that will power it an estimated 100 miles on a gallon of gas. If Mr. Waters has his way, thousands of these cuddly vans will soon be double-parked all across America, blocking travel lanes while their drivers wait for someone – anyone! – to sign for these darn packages, please.

Years ago Waters worked on General Motors’ legendary EV1 electric car program. Now he’s president and CEO of Bright Automotive, an Anderson, Ind., start-up that’s recruited many EV1 veterans to help develop a new generation of hybrid trucks and cars.

“It’s the wealth of experience of our people that will make this work,” he says.

One hundred and one years after the debut of the Model T, the automobile – and the iconic industry that produces it – may be on the cusp of changes as profound as any ever wrought by Henry Ford.

Detroit is in crisis. The Big Three is no more. In the wake of recession, GM’s and Chrysler’s bankruptcies, and Chrysler’s merger with Fiat, the traditional Michigan-based automakers now might better be called the Medium Two and One-Half.

Meanwhile, a new generation of auto entrepreneurs is rising, committed to building greener modes of transportation in new ways. They’re scrambling for billions in government aid intended to jump-start production of vehicles that burn little gasoline – or no gasoline at all.

Plus – and this sounds odd, given the current emptiness of US showrooms – the auto industry may be about to see its biggest growth spurt ever. Developed nations choke on traffic, but in the rest of the world hundreds of millions of consumers yearn for their first set of wheels.

Brazil, Russia, China, India, and Indonesia are among the rapidly emerging countries where per capita incomes are at or near the level at which auto ownership typically takes off. Consulting firm Booz & Company predicts the world will have 1.5 billion cars in use in 2018, up from 672 million today.

Who will produce those vehicles? What will they look like? These questions will help shape some of the industries of tomorrow, and, along with them, the economies of nations. For now, new firms such as China’s Geely and India’s Tata are now rising to challenge the founding titans of the horseless carriage.