Most people who read this site have likely seen the plethora of news items sloshing through the infosphere about how the number of cars in the US declined by 4 million in 2009 because we scrapped 14 million and bought “only” 10 million. In particular, there’s a lot of deep thinking and talking about What This Really Means.
The Shrinking American Car Fleet:
“This shrinkage of nearly 2 percent is without precedent, except in wartime,” said Lester Brown, president of E.P.I., in a conference call with reporters.
The decline – the first seen since World War II – was driven in large part by the recession, which sharply curbed new car sales. But broader social and economic forces were also at work, including the saturation of the American market and a declining interest in cars by the latest generation of young Americans, Mr. Brown argued.
These forces will likely continue to drive down the size of the American auto fleet through the coming decade, even in the event of a strong economic recovery, he said.
If current trends persist, the number of cars in the United States – now around 250 million – could fall by 10 percent by 2020.
“We expect this shrinkage to continue for the indefinite future,” Mr. Brown said.
First and most trivially, I think that what’s being measured here is cars and light duty trucks (SUVs, minivans, and pickup trucks), and not merely cars in the narrow sense of the term.
Second, I think we should all take a deep breath and calm down. Yes, this is a notable reversal of a long-time trend, as the article above points out. But the US is likely to see continued population growth, fueled largely by immigration, which could make last year’s drop look increasingly like the product of the recession and not a fundamental societal shift.
Notice that according to the latest numbers as I type this, the number of miles driven (see October 2009 Traffic Volume Trends), a much more important stat, in my opinion, was up marginally (+0.2%) for the first 10 months of 2009 compared to the same period of 2008. How much do you think VMT was suppressed by so many people being out of work? Could it be that people are simply getting rid of cars they don’t really need, and that this is more of a one-time adjustment and not a long-lived trend?
It’s worth remembering when the “is it the recession or is it X” discussion comes up in various circles is that this recession was not at all a garden variety downturn. Not only was it steeper and deeper, but it was far scarier. If you watched the business news shows in late 2008 and early 2009, read the financial news closely, etc., you knew that not only were mainstream consumers whacked hard by unemployment, but a large portion of the “investing class” was terrified. We came perilously close, within a few hours, by some accounts, of the entire US credit system grid locking and throwing us headfirst into Great Depression II. That combination of real-world (unemployment) and perceived (bullet whistling past your ear) impacts made a lot of people take big steps to tighten their financial belts.
What will we see in 2010, 2011, and so on for US vehicle ownership? I have no freakin’ idea. But if there’s one thing I learned about such situations in my economics training, it’s that no one else has any freakin’ idea, either, and we should all stop saying this definitively is or isn’t a “permanent” trend.
