Chart of the day: Car ownership

By Felix Salmon
June 1, 2009

Light_vehicle_sales.PNG

Many thanks to PeakVT, in the comments, who links to this particularly ugly chart which does do what I wanted and show how the number of cars per 1,000 population has evolved over time. The lines are sales figures; the darker line shows that we’ve dropped from selling almost 60 cars per 1,000 population per year to selling about 35 of late. The black squares show that we now have about 780 vehicles per 1,000 population, up from about 750 ten years ago.

In other words, for most of the past decade, every group of 1,000 people bought about 60 cars a year and ended up with about 3 more vehicles at the end of the year than they had at the beginning. So what happens when they’re only buying 35 cars a year? Even if they manage to hold on to their old clunkers for a bit longer than they otherwise might have done, the total number of cars per 1,000 people is likely to fall quite dramatically: a year or two of this and we could be back where we were ten years ago.

Still, check out this league table: the US has vastly more cars per 1,000 people than any other major nation. Canada, for instance, has only 563 vehicles per 1,000 people — less than three-quarters of the US figure. For America to even approach that level would be unprecedented in living memory, but there’s really no particular reason why the average American needs 36% more cars than the average Canadian. If you’re losing say 15 cars per 1,000 people per year, it would take over 14 years to get down to Canadian levels of car ownership.

Hugo Lindgren, in this week’s New York magazine, quotes the NBER’s Robert Gordon saying that auto-sales rates are bound to pick up:

It’s hard to imagine any good news out of Detroit at this point, but Gordon says it’s coming. Before the recession, annual U.S. automobile sales were about 18 million vehicles. They’ve dropped to half that, an insanely low—and unsustainable—level. At this rate, the average car would have to last 25 years. A typical replacement rate would boost auto sales up to around 15 million a year, and Gordon expects that we’ll start working our way back to that figure this year, buoying the stronger auto companies and putting workers back on the line.

If we’ve learned anything over the past decade, it’s that things can stay at unsustainable levels for much longer than anybody might imagine. And over the medium term, it’s far from obvious that auto sales in the 9-10 million range are really as unsustainable as all that. Not only don’t we need to get back to “a typical replacement rate”; it’s actually very unlikely we will ever again see the rates of car ownership that prevailed before the crash. That was a world of 3-car garages in exurban McMansions; we’re moving into a more sustainable way of living, which involves fewer cars and higher urban density. Those black squares in the graph above are going to start marching downwards for many years to come. Which means that the wiggly lines aren’t ever going to regain their prior peaks.

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