ASK anyone of different generations what their first memory of cars were, and chances are no two answers will be the same.
The automobile has changed and evolved so much over the last half a century, influenced by the cost of energy.
The correlation between fuel prices and automobile sales, or even automobile design, is fairly established through study.
The buying public’s wants and needs are rationally driven by affordability whilst emotionally driven by socioeconomic status.
The United States led automotive development in the 1950s and 1960s, with many Asian markets including Malaysia, importing and selling US brands like Ford, GM and Chrysler.
In my youth, cars were big statements: they were emotional, signalling freedom and the conquest of the elements, with fuel being cheap and plentiful.
In the early 1970s, a series of global oil and energy crises and embargoes meant having a big gas-guzzler was no longer feasible.
Oil prices went from US$2.90 per barrel to US$11.65 per barrel by the end of the decade, sending the world into a tailspin.
Now, if I told you that the price of petrol could go up from RM2.05 today to almost RM5 in the next few years, how shocking would that be?
At the time, the United States was still the biggest automotive market and heavily influenced the kind of cars being built.
The oil crisis led to major changes, one of which was the increased importance of fuel economy.
This shift effectively downsized automobiles, giving greater prominence to smaller, more compact cars, while phasing out the gas-guzzlers. This opened the doors for the Japanese car industry, which was still finding its footing but wasn’t yet competitive in markets that didn’t prioritise fuel economy.
The volatility of global fuel prices in the 1970s was the perfect moment for the Japanese, who were poised to dominate by building better cars quickly and more cost-effectively through efficient production processes like the Toyota Production System, which was fully developed by 1975.
By the mid 1970s, the world sat up and realised that the future was in downsizing, not upsizing.
While the American auto industry was hit hard, the Japanese makes flourished.
The popular Continental brands underestimated the cheaper, more economical and reliable Nissans, Toyotas, Hondas and Mazdas, which put more Malaysians on the road than ever before.
Then, in the 1980s, the government upped the ante with the national car projects – first Proton, then Perodua – supported by national road and highway infrastructure projects.
This effectively made Malaysians more mobile, both socially and physically.
Today, Malaysia has one of the highest vehicle populations per capita in Asia, second only to Brunei.
As of 2023, there were 678 vehicles per 1,000 people.
While we truly love our cars and the freedom of mobility, we have been sheltered from global fuel price fluctuations, thanks to being an oil producing country.
We have been able to hedge our prices on the global market and offer fuel at subsidised rates to our people.
But these subsidies are set to end soon, and we may see fuel prices increase by more than 50%.
Fast forward to the late 1980s, and people were starting to take notice of the groundswell in environmental awareness.
Heavy smog and pollution in urban centres made people realise that tailpipe emissions were to blame, and once again, the petroleum industry was the bad guy.
Today, the transport sector accounts for approximately 25% of global greenhouse gas emissions, and frugality is in again – but this time through the lens of environmental concern, alongside fuel efficiency.
By the mid 1990s, legislators worldwide were racking their brains on how to feasibly implement emissions reduction, while facing backlash from virtually every carmaker.
It was against this backdrop that Toyota and Honda would change the face of carbon reduction in mobility.
It was no accident that Toyota chose California for the world debut of the Prius, the first mass-produced hybrid car.
If it could meet California’s stringent emissions laws and look cool at the same time, it could pave the way for success everywhere else.
Celebrities and media personalities wanted to be seen in a Prius, hybrids hit the mainstream, and fuel efficiency became cool.
We are also experiencing major changes in the kinds of vehicles Malaysians are buying.
Incentives for electric vehicles (EVs), the removal of diesel subsidies, and a looming targeted subsidy mechanism for petrol are all set to shift how people buy and use cars.
Malaysians spend between 9.7% and 11.3% of their household income on transportation.
So, can we have the best of both worlds?
Big, sporty, exciting, luxurious cars that are also economical to buy and run?
Simply put, yes.
Most car brands have now downsized and augmented big engines with electrification.
Carmakers must embrace buyers’ demand for the best of both worlds, without sacrificing one for the other.
It’s how we create better cars for a more discerning and ever-evolving audience.
In the next decade, we will see big changes in the global energy supply mix, transmission and storage technologies, and powertrain technologies.
The future looks more diverse than ever as we transition to a carbon-free world.
We now have a good mix of technologies – petrol, diesel, hydrogen, synthetic fuels, and xEVs.
We look forward to balancing the best solutions to the challenges that lie ahead, ushering in a better tomorrow.
The views expressed here are the writer’s own.
