TRANSPORTATION:

U.S. vehicle fleet shrank 2% last year, biggest decline in decades -- report

Americans scrapped 4 million more cars and trucks last year than they purchased, the first significant drop in the U.S. auto fleet in more than four decades, according to a new report.

The United States scrapped 14 million vehicles last year while buying only 10 million new ones, dropping the nation's fleet from an all-time high of 250 million to 246 million, according to the Earth Policy Institute.

Lester Brown, the author of the report, said the drop -- the first significant shrinkage the U.S. fleet has seen since record-keeping began in 1960 -- represents a "cultural shift away from the car" and estimated the fleet size will continue to recede during the next decade. He estimated the fleet could shrink a total of 10 percent by 2020.

"No one knows how many cars will be sold in the years ahead, but given the many forces at work, U.S. car sales may never again reach the 17 million that were sold each year between 1999 and 2007," Brown said. "Sales seem more likely to remain between 10 million and 14 million per year."

The report comes one day after the automakers posted sales numbers for December, a month that showed a small but significant uptick in sales and brought a close to what has been one of the worst years in the history of the industry (E&ENews PM, Jan. 5).

Brown said this summer's federal Cash for Clunkers program, which paid Americans to scrap old cars and trucks for newer, more fuel-efficient ones, played only a small role in the downward trend because it accounted for roughly 700,000 cars. "It has an effect but a minor one," he said.

Instead, Brown attributed the drop to a number of other factors and stressed that it was being driven by more than just the current economic recession, which is widely seen as the major cause of the recent sales slump that has plagued the auto industry.

Among the reasons cited in the report were market saturation caused by more registered vehicles than licensed drivers, economic and environmental concerns, and a shift away from the importance and prestige of the automobile in the youth culture.

"Perhaps the most fundamental social trend affecting the future of the automobile is the declining interest in cars among young people," Brown said. "Many of today's young people living in a more urban society learn to live without cars. They socialize on the Internet and on smart phones, not in cars."

Assuming the fleet downsizing continues, Brown said it would cut long-term oil demand and greenhouse gas emissions from the transportation sector, which currently accounts for roughly a third of U.S. emissions. He said it could also lead to increases in steel supplies as big cars get recycled and fewer are produced.

He said the trend will also decrease the need to build new roads and highways, and that fewer cars and trucks on the road would cut maintenance and repair costs, as well as decrease demand for parking lots and parking garages.

"As this evolution proceeds, it will affect virtually every facet of life," Brown said.

The report was based on data from the Transportation Department's Federal Highway Administration and was compiled with the help of R.L. Polk & Co., an automotive research and consulting firm.

Click here to read the report.

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