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Monday, November 4, 2013

Have Americans stopped buying cars?

The problem with the auto industry is layered upon the lack of consumer confidence. People are simply not buying cars. –Jennifer M. Granholm
Vehicles can be driven for over a decade if well maintained
200K miles on a car is average per Time magazine
By Damien S. Wilhelmi

It’s big news, for the first time in over 50 years there are actually more eligible drivers in America than there are vehicles. In a study done by The American Association of State Highways and Transportation Officials, entitled, Commuting in America 2013, they’ve outlined quite a few changes that are occurring in regards to Americans outlook and attitudes toward automobiles. And lo and behold, their attitudes are bleak. What follows here is a synopsis of that report, highlighting what I found to be the most important information.  

Number of driver license holders remains strong

Nearly 90% of the American population ages 16 and up actually have driver’s licenses. This level also increases to nearly 100% through early adulthood and only begins to peter out when people reach the age of 65. This has remained the same for quite some time, and no real noticeable change has been found.

Vehicle accessibility

The growth of available vehicles has increased at about the same rate from 1960-2010. However, the number of drivers able to drive has in the last 10 years increased at a much greater rate. What they also found was that the number of cars per household has changed dramatically over the last 50 years.

Over the last 50 years, the number of households with 0 vehicles has actually decreased by nearly 1,000. Households with a single vehicle has increased by 8,500, Households with 2 vehicles have increased by a staggering 33,000 , and Households with 3+ vehicles has jumped by an astounding 20,000. 

What this says is that the biggest change has occurred with Households with 2, or 3+ vehicles. There are many explanations to this, though in part it is no doubt due to children coming of age and being able to drive. Few people have more than a single vehicle for themselves. So when a household only has 1 vehicle, there are probably fewer drivers in the household as a whole. In essence, this is highlighting the aging of Americans next generation of drivers.

Commuting is becoming increasingly difficult around dense populations

As you would imagine with an increasing populace, the density of that populace makes transportation overall more difficult. For regions with a population density of less than 2,000 people per square mile, only 5% of households have 0 vehicles, 25% have at least 1 vehicles, while 70% have 2 or more. For population densities of 2,000-4,000 people per square mile, 7% have 0 vehicles, 35% have at least 1 vehicle, 68% have 2 or more vehicles. For population densities of 4,000-10,000 people per square mile, 10% have 0 vehicles, 35% have at least 1 vehicle, while 55% have 2 or more. Finally, for population densities of 10,000 or people, 30% have 0 vehicles, 40% has at least 1 vehicle, while 30% have 2 or more.

So what all of this tells us is that for those that live in more rural areas, nearly every household has a a new or used car, which makes sense as public transportation is probably less common or efficient. This gradually changes as more people are put into smaller spaces, until you finally reach a city with 10,000 people per square mile, where 30% of the population doesn’t have a vehicle. This too makes sense as owning a vehicle in a city is difficult and public transportation is more available.

So have Americans stopped buying cars?

What this report highlighted to me was that vehicles are still being purchased at a similar rate as they were in the past. But as American population density increases across the country, fewer and fewer people find it necessary to own an automobile. As a population grows, public transportation is provided and made more accessible, and owning a vehicle can become more of a pain than not owning one. So in the end, fewer Americans are purchasing vehicles because fewer Americans find a need for them. But automotive sales, in general, have not really been affected that negatively.

What this should highlight for automotive manufacturers is that an ever increasing number of people are relying on public transportation because owning a large burdensome vehicle is not all the alluring to these consumers. What should be provided are alternative forms of transportation, smaller vehicles, or even different modes of transport than have been offered before. Whether that be scooters, Segway’s, or mechanized bicycles, it is clear there is a demand, but what is being supplied, at least to a growing portion of the populace in densely populated areas, is not wanted.  

About the author: The author of this article is Damien S. Wilhelmi. If you enjoyed this piece you can follow me on Twitter @CustParadigm. When I’m not reviewing automotive reports in my free time, because that is oh so enthralling, I can usually be found grease monkeying it up at a local transmission service provider in my hometown of Denver Colorado.  

Image license: Chris1961, RGBStock royalty free