That is, in an era of expensive energy and scarce resources, a car-dependent culture has no real future and is in fact a hindrance to progress in other directions. That is quite a viewpoint, well-presented by Kunstler in his writing. It’s depressing, but it sure gets your attention.

Criticism of the automobile culture is not confined just to social commentators like Kunstler. Another remarkable indictment comes from no less an automotive insider than John Heywood, the director of the MIT Sloan Automotive Laboratory. He has stated that “cars may prove to be the worst commodity of all.”

What’s worse, even if we improve vehicle efficiency, turn to fuel hybrids or make rapid advances in hydrogen-based fuel technologies, the scale for slowing down the degradation may run to the decades. Turning the curve won’t be easy,” Heywood said.

People are going to have to do things differently

You can agree or disagree with the broad themes of Jim Kunstler or John Heywood. But there’s no argument with one of Heywood’s points. Wherever we are going, it will not be easy to “turn the curve.” Looking forward, the oil just is not there to fuel cars in the future in the way that we did it in the past. So a lot of people are going to have to do things differently.

Worldwide, the automobile industry has seen the handwriting on the wall. Fuel is expensive, and is getting more so with each passing year. So the industry has invested tens of billions of dollars in improving engine and power train efficiency.

In addition, auto designers are coming up with new ways to eliminate weight and drag. (At higher speeds, up to 70 percent of the energy used to turn the wheels on a car goes just to push the air out of the way of the chassis.) The auto industry is looking towards different sorts of fuels, and moving towards what is called fuel-flexibility.

Profit Plays for the Next Great Car Market

Already we’re seeing signs of the automobile’s future, as well as who are becoming the biggest car buyers.

Sales have tumbled for U.S. automotive titans Ford Motor Co. (F), General Motors Corp. (GM) and Chrysler LLC because of soaring gas prices, slowing U.S. economy and global interest trending toward smaller and greener cars.

Meanwhile, new battlegrounds emerged – China and India. General Motors and Toyota Motor Corp. (TM) have different strategies for capturing the burgeoning Chinese consumer market.

However, the company that could best them all (and dually serve its investors nicely) is Tata Motor Group (TTM), which just recently purchased luxury brands Jaguar and Land Rover from Ford for $2.3 billion.

It’s also creating a huge buzz for its $2,500 car, the TTM, a stripped down two-seater designed solely to get from point A-to-B. That price undercuts Tata’s Indian competition by about 30%, and is certain to add to the company’s market share even as it causes that country’s overall auto market to expand.

Not only is Tata a formidable competitor at the bottom end of the market, in India and other emerging markets, but with its new marquee brands and strong manufacturing capabilities it is likely to make substantial inroads at the top end also.

Where the Rubber Meets the Road

China and India have populations several times those of the United States and European Union, an increasing proportion of whom are becoming wealthy enough to buy an automobile, yet their labor costs are and will remain a small fraction of those in the United States, Japan or Germany.

At the same time, because of their size, India and China will retain important economies of scale in their domestic markets over other countries with similarly low-wage costs. That suggests that more and more of the world automobile industry will migrate to those two countries in the next 25 years. Investors in Indian and Chinese automobile manufacturers are likely to make a lot more money than buyers of Ford, General Motors or even Toyota.

Tata Motors has ADRs fully listed on the New York Stock Exchange so its shares are easy to buy, and currently trade at an earnings multiple in the mid-teens. Its main rival Mahindra does not have ADRs so you’d have to buy its Global Depositary Receipts through London or Frankfurt.

In China, the only automobile manufacturer with ADRs, although only on the Pink Sheets, is Brilliance China (BCAHY), which is currently loss-making.

That doesn’t give you a lot of choice. However, never fear: the automobile business requires large amounts of capital, so in future years both Indian and Chinese manufacturers will doubtless come to New York seeking your money.

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