Is this the end of America’s love affair with the car?

Car ownership numbers peaked in Japan in 1990 and have been trending downwards for twenty years. There is now a worry in auto manufacturing circles that this trend may about to be repeated in the USA. We all know about the travails of the American car industry, where both GM and Chrysler have been bailed out financially (again) by the US government in the face of a major drop in new car sales and that this drop was originally attributed to the recession. But there may be more deep-seated cultural changes at work that are changing America’s driving and car ownership patterns.

Previously, the industry could predict quite accurately the number of new car sales, as from 1994 up to and including 2007, Americans consistently bought approximately 17 million new cars a year.  The recession caused what can only be called a catastrophic drop (almost 40%), and in the last two years only 10-11 million cars a year have been sold. 

This LA traffic jam is now 42 years old

But in the last year, 14 million cars were scrapped.  Simple arithmetic here shows that there are now 4 million fewer cars on US roads than there was a year ago. In other words, the American car fleet is shrinking, even though there are still five cars for every four licensed drivers in the country. But if Americans were to become more like Canada, where there is only three cars for every four licensed drivers, then the US could scrap and not replace four million cars a year for the next thirty years.

And that would be a game changer for the business.

In terms of social and cultural trends that might be affecting car ownership, NPR reports that:

  •  U.S. public-transit ridership has been climbing steadily since 2005.
  • Local governments are rethinking their old habit of subsidizing free parking.
  • People are worried that $4/gallon gas could come back.

And, oddest of all, young people aren’t nearly as excited about driving as they used to be:

Perhaps the most fundamental social trend affecting the future of the automobile is the declining interest in cars among young people. For those who grew up a half-century ago in a country that was still heavily rural, getting a driver’s license and a car or a pickup was a rite of passage. Getting other teenagers into a car and driving around was a popular pastime.

In contrast, many of today’s young people living in a more urban society learn to live without cars. They socialize on the Internet and on smart phones, not in cars. Many do not even bother to get a driver’s license. This helps explain why, despite the largest U.S. teenage population ever, the number of teenagers with licenses, which peaked at 12 million in 1978, is now under 10 million.

So, are these latest car-related figures another signifier of the potential decline of the U.S.  as an economic power?

When looked at in conjuction with a number of key statistics emerging from China in the last year, I would have to say yes.  These include the fact that:

  • China became the largest producer of cars in the world.
  • For the first time, the Chinese purchased more new autos that the Americans.
  • China became the biggest creditor nation that world has ever known.
  • China overtook Germany as the world’s greatest exporting nation.
  • The US is the greatest debtor nation in history.
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2 Responses

  1. [...] Year car ownership peaked in Japan: 1990 [...]

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