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U.S. car ownership shifts into reverse Add to ...

Americans' infatuation with their cars has endured through booms and busts, but last year something rare happened in the United States: The number of automobiles actually fell.

The size of the U.S. car fleet dropped by a hefty four million vehicles to 246 million, the only large decline since the U.S. Department of Transportation began modern recordkeeping in 1960. Americans bought only 10 million cars - and sent 14 million to the scrapyard.

The decline in sales from previous years came despite 2009's cash-for-clunkers program, in which the U.S. government gave Americans up to $4,500 (U.S.) to trade in their gas guzzlers for new, more fuel-efficient cars - a program that saw nearly 700,000 vehicles scrapped.

And the overall drop in car ownership has prompted speculation that the long American love affair with the car is fading. Analysts cite such diverse factors as high gas prices, the expansion of many municipal transit systems, and the popularity of networking websites among teenagers replacing cars as a way of socializing.

"We've reached a sort of saturation point in this country" when it comes to cars, said Lester Brown, president of the Earth Policy Institute, an environmental think tank based in Washington.

The institute is issuing an analysis Wednesday that contends the drop in 2009 isn't a one-time fluke caused by the recession, and that U.S. car ownership is likely to be entering a longer-term decline that will see the fleet drop by another 25 million by 2020.

In previous recessions, car ownership either plateaued for a couple of years, or, as occurred in 1991, the only other time it actually fell, declined by a modest one million before resuming an uptrend.

Of course, such a turnaround could happen again. And no one's saying that the massive U.S. highway system will suddenly become obsolete, that traffic jams will be nothing but a jangling memory, that teens won't still steer junkers to football games and lovers' lanes and a shiny new car in the drive won't still warm parents' hearts. Americans' romance with the car is too deep-seated to just disappear.

But in an interview, Mr. Brown said one factor suggesting auto ownership numbers can go into permanent reverse is the sheer size of the U.S. car fleet relative to the number of drivers. Currently, there are 117 motor vehicles for every 100 people with licences, and it is difficult for him to see why people would continue to accumulate more cars than they can use.

"That's kind of a definition of saturation, when the number of vehicles exceeds the number of licensed drivers," Mr. Brown said.

He said the high debt load from purchasing cars and other automobile-related costs will lead some three-car families to cut back to two cars, and those with two cars to trade down to one or none. Better transit systems and the influx of residents into downtown areas of some U.S. cities are also cutting down on car usage.

Even that familiar teenage rite of passage - getting a driver's licence - appears to be diminishing, an inauspicious trend for cars. Although the U.S. teen population is the highest on record, the number with driver's licences is less than 10 million, well below the peak of 12 million in the late 1970s, according to figures compiled by the Earth Policy Institute. Mr. Brown said many teens aren't using cars to socialize, as they would have a generation ago, and instead are using the Internet and smart phones.

Worries over a downward trend in car ownership are on the radar screens of automotive analysts, too.

"The drop in ownership is arguably one of the absolute most serious downside threats to the North American auto industry," said Dennis DesRosiers, head of DesRosiers Automotive Consultants Inc. "… I call it the nightmare scenario for the industry."

But Mr. DesRosiers said the forecast that ownership could plunge for a decade is "highly debatable," and he foresees levels staying about where they are now, or declining slightly. In his view, the biggest cause of the ownership drop is the lack of financing for vehicle purchases caused by the economic crisis last year, a problem that should eventually be solved.

"If you loosened the financial system back to where it was just a couple of years ago, vehicles on the road would grow, grow quite dramatically again," he said.

Ownership levels in Canada and the U.S. are markedly different. There are about 75 cars on the road in Canada for every 100 people of driving age, including both those with and without licences. In the U.S., the comparable figure is 100 cars for 100 people of driving age. Mr. DesRosiers said that if Americans became like Canadians in car ownership, it would be devastating for the industry, because six million to eight million fewer cars would be needed annually.

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