Whither new car sales?

By Felix Salmon
May 31, 2009

The NYT has an interesting chart showing light-vehicle sales, on a seasonally-adjusted annual basis, every month since 1976. The chart would seem to imply that a large uptick in vehicle sales is in the offing. But there’s one other chart I would like to see total cars per household (or per person) in the US. Was there a significant increase in cars per household as America suburbanized and moved into bigger homes with bigger garages? And if we’ve reached a far-too-high number of cars per household, how long will new-car sales have to remain near current levels before we get back down to a “new normal”?

I think that when auto financing becomes broadly available once again, the number of new-car sales is bound to rise. But those new cars might well be smaller and less profitable than the SUVs of the past decade. I suspect that much of the boom in SUV sales was a function of everybody else buying SUVs: it’s much more pleasant to drive a small car in Europe, surrounded by other small cars, than it is to drive a small car in the US, surrounded by SUVs which you can’t see around and which tower menacingly over you.

What happens to car sales when the getting-bigger trend comes to an end — as it must — and starts to reverse course? For one thing, the desire to upgrade to a bigger car starts to dissipate. And if you’re not going to upgrade to a bigger car, why buy a new car at all?

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Comments
16 comments so far

To upgrade to a fancier smaller car. Small cars are equated to saving gas money right now, but eventually there will be more stylish smaller cars that will have safety and style as their key selling points.

That will generate some sort of aspirational brands and entice people to buy smaller cars. Only a matter of time.

I’d like to second Manshu. Better doesn’t have to imply bigger, though in recent years that annoying American idea has infected even European and Asian carmakers. To my secret glee a decade or two ago, my brother and his girlfriend upgraded their rental car because a friend was joining them on a trip to Italy. The German car that awaited them was wonderful, and suitably expensive. Bigger? Not so much.

Posted by HS | Report as abusive

In the 1950s, the maxim for each years redesigns was ‘lower, longer, and wider’. The future may well be lower fuel consumption, longer life parts, and wider availability of individualization.

One of the interesting numbers in the NYT piece is the sharp decline in cars sold per driver. As the population ages, retired couples find that the need for 1 car per driver goes down. Also the new car sharing services allow couples to get by on one family car + shared cars when needed. This suggests that we may not return to the traditional 0.76 vehicles sold per driver anytime soon.

Posted by tomrus | Report as abusive

What is needed is a fuller grasp of reality, i. e. not “when” auto financing becomes widely available again, rather “if”.

Posted by Harry J. Krebs, Jr. | Report as abusive

I don’t have the data to hand, but I worked out car sales per adult in the US are now lower than any time since the 1940s, and that trend is quite long-running, ie in the boom of 2000-2004 they were lower per adult than the previous boom. I guess that is there are very few buyers who now need to buy a car, but also cars do last longer.

[Anti-spam word was van]

Posted by Matthew | Report as abusive

I listened to a sad lament by a car salesman yesterday while waiting for my spouse to testdrive one of the few used cars on the lot. The country is just about out of used cars. It’s ridiculous.

Big cars are a time of life thing–SUVs had their moment for the past 20 years because boomers needed to cart lots of kids and stuff. Now, the baby bust means fewer are needed anyway. But when you need them, you need them. I don’t think Obama’s green team appreciates that. Would they rather have you drive four Priuses 30 miles to your kid’s hockey game or one carpooling Suburban? Questions like this matter.

Posted by Kelli K | Report as abusive

I personally have a minivan for carting the whole family, and two cars for daily transport.
the van runs about 6000 miles a year when money is not tight, less if it is.
my van is from 1990 and gets 23 MPG, much better than the suburban

Posted by steve | Report as abusive

But there’s one other chart I would like to see total cars per household (or per person) in the US.

Ask and you shall receive (though it’s pretty damn ugly).

Posted by PeakVT | Report as abusive

Ummm…. Better mileage?

Posted by melior | Report as abusive

I don’t like SUVs or minivans but if you have kids and you or the kids like sports, a small sedan doesn’t do it, even in the city. You can’t get half a soccer team to Randall’s Island in a Camry. Nor can you take a family of 5 to VT to ski.

I doubt the statistics will change anytime soon seeing that old cars are close to non-existent on the roads. Of course this doesn’t include old vintage cars. Owning a new car has become so easy and convenient these days that consumers would rather purchase a brand new buy than take the trouble to inspect and examine a second-hand model. Of course with the engine advancements and easy financing, just makes it much easier and more sense to get a brand new ride as well.

Peter
http://www.pmwltd.co.uk/

Posted by Anonymous | Report as abusive

Kellie Auto Sales

Posted by JoyRussell | Report as abusive

Automobiles today come in enough sizes and shapes to meet just about any consumer’s demand. This may be a luxury, but it can also make choosing the right vehicle a tough decision. This choice often boils down to the size of the vehicle, and this is completely up to any owner’s preference. When purchasing car, you can refer to class-leading dealer websites for information; some of these websites provide good information for your needs. As e-commerce systems continue to develop, they progress at an accelerated pace to meet our expectations and increase efficiency.

Albert
http://www.sparkstone.co.uk

Posted by AlbertSparks | Report as abusive
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