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A new piece of analysis by Bain & Company, as reported by CNBC, paints a picture of a US car market contracting between now and 2024 as market forces make the auto biz uncomfortably competitive. Bain cites declining fertility as a cause, along with decreased immigration\u2014in other words fewer people to buy cars to begin with. The auto industry matured, the report says, amid the expectation of 1% population growth per year, and population growth is now just about flat. But Bain says there\u2019s also the issue of changing \u201cbehavior\u201d among transportation consumers. Oh, and Bain also acknowledges that cars are just too damn expensive for many people now. A different forecasting firm called AutoForecast Solutions told CNBC it expects flat sales for about the next seven years, and told that publication, \u201cWhen you look into the future, younger people are more likely to use Uber or Lyft when they\u2019re going somewhere.\u201d If this is meant to be a projection about the future, it might be a fanciful assumption in its own right, since inflation keeps hitting ride-hailing apps, and riders seem to be cutting back to save money. Nonetheless, Bain points out that today, only half of 16-year-olds have their driver\u2019s license, as opposed to 70% from 1966 through 1984. Though Bain also says \u201cmost people\u201d get around to getting their license by the time they\u2019re 25.<\/p>\n
A report last month in the Wall Street Journal combined projections from Ford, GM, Toyota, and other automakers, and concluded that a tranche of about a million new car buyers has disappeared from the U.S. economy, probably never to return. It\u2019s been widely reported that new cars in general are just shockingly expensive now. There are literally no sub-$20,000 new cars in America, and the average cost of a new car is around $50,000. Consequently, according to Bain, monthly payments for new vehicles have climbed 30% over four years. Somehow, one fifth of new vehicle monthly payments is more than $1,000. Millions of people are paying that, if you can believe it.<\/p>\n
And you might have noticed that cars on the road are simply older. The report says in the year 2000, the annual rate at which cars underwent \u201cderegistration\u201d or were removed from the roads\u2014junked, mostly\u2014was 6%. In 2025, that number was 5%, and it could be 4.4% by 2040. But if you are buying a new car, there\u2019s a very good chance you\u2019re approaching retirement age. Consumers aged 55-plus buy almost half of new cars, Bain\u2019s report says, and so automakers cater to their preferences. 18- to 34-year-olds accounted for 12% of new car registrations in 2021, and that number was under 10% last year.<\/p>\n
Bain partner Mark Gottfredson told CNBC what he believes the consequences are going to be for the car companies themselves: \u201cThe competition in the U.S. is going to be ferocious,\u201d he told them, adding, \u201cThere\u2019s too many automakers and too many brands competing for the consumers. The market is going to have to consolidate.\u201d There\u2019s little reason to think nameplate consolidation will benefit consumers. We crave small, normal cars like sedans\u2014which are now rare to nonexistent in the U.S.\u2014at normal prices. U.S. automakers acknowledge and lament the lack of small cars. But the markups automakers get away with relative to manufacturing costs don\u2019t offer a path to profitability compared to hulking, and more profitable, SUVs. A new piece of analysis by Bain & Company, as reported by CNBC, paints a picture of a US car market contracting between now and 2024 as market forces make the auto biz uncomfortably competitive. Bain cites declining fertility as a cause, along with decreased immigration\u2014in other words fewer people to buy cars to begin […]<\/p>\n","protected":false},"author":1,"featured_media":6275,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[676],"tags":[2228,2229,2230],"class_list":["post-6274","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech-ai","tag-automakers","tag-cars","tag-transportation"],"_links":{"self":[{"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=\/wp\/v2\/posts\/6274","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6274"}],"version-history":[{"count":0,"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=\/wp\/v2\/posts\/6274\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=\/wp\/v2\/media\/6275"}],"wp:attachment":[{"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6274"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6274"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/daiilynews.cu.ma\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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