Auto Industry Analyst Predicts Decline of the Two-Car Household
Bailey Mareu, 30, and her husband were looking for ways to save money after she left her job to help run the family business in Lawrence, Kansas, two years ago.
So they decided to downsize from two cars to one. The Mareus were both working from home most days, and they were just a mile-and-a-half walk from the shops and restaurants of downtown Lawrence.
“It just kind of made sense financially,” said Mareu. “We decided to sell my car because it has the higher loan amount on it.”
What Mareu and her husband did might be the wave of the future, according to the automotive division of consulting giant KPMG. While predicting continued global growth in car sales as countries like India and China become more affluent, KPMG’s recent white paper about trends affecting the car industry [PDF] sees different forces at work in the United States.
In the U.S., says KPMG, car sharing companies like Zipcar, on-demand car services like Uber, and even bike-share will eat away at the percentage of households owning multiple vehicles, especially in major cities. Today, 57 percent of American households have two or more vehicles. KPMG’s Gary Silberg told CNBC that the share of two-car households could decrease to 43 percent by 2040.
In this scenario, KPMG predicts that the rise of “mobility services” will displace car ownership by providing similar mobility but without the fixed costs. The typical new car now costs $31,000 but sits idle 95 percent of the time. Given other options, Silberg told CNBC, many Americans will be happy to avoid that burden.
Other contributing factors flagged by KPMG include increasing urbanization, telecommuting, changing travel preferences among younger generations, and growing traffic congestion in big metro areas.
next year when i don’t have to drive kids to daycare anymore i’ll just park my car most days and walk them to school. i used to buy a car every 2-3 years but i’ll be keeping my now 4 year old car for a lot longer than 5. why buy a new car if i only drive it around 5000 miles a year
Surely, the people whose good fortune depends on heavy purchase and use of cars must be concerned. They must be coming up with a roadmap to reverse this crisis. As bike/walk/livable cities advocates, we need to be watchful for how/when that agenda manifests itself.
I’ve seen several articles about this trend, but they all seem to focus on car share and ignore changing commuting patterns. When both members of a couple drive to work, being a single car household is very difficult. When one or both members of a couple have a carefree commute being a single car household is an easy adjustment.
I’ve thought about that, too. I wonder if there will be parallels to Big Tobacco and Hollywood in that they’ll do their best to minimize the decline in demand in the US but also ultimately accept it by simultaneously pursuing emerging growth markets outside of the US (China, Brazil, etc.). To some degree that’s already been happening.
And I’m thinking of how US business came out swinging in the ’70s, in the wake of the “Powell Memorandum”. Don’t count Tobacco out, yet. They have a chance to restore their position when cannabis goes legal.
As our transportation systems become more sustainable and robustly multimodal, the product lines of auto companies should too. I’d love to see velomobiles, city cars, trams, and buses from GM, Ford, etc.
I just don’t see this pattern on the perimeter of SF. Almost every household in the Excelsior, Vis Valley and Sunset have 3 plus cars. Must be related to all the single family homes and once illegal in-laws that are now multi unit dwellings.
This will help defray the costs in places where it’s possible to do this and where one can work nearby or from home. Living in St. Paul with a job moving to an outer suburb, folks like me will get left behind. I wonder if we’ll see some migrations to larger and/or better laid out cities and metropolitan areas because of this.
I’d say some factors are:
– High housing costs leading to more adults in every household (both in terms of roommates and illegal in-laws)
– High housing costs make cars relatively cheap, while free parking means there’s little incentive not to have one.
– Official and unofficial public policy which maintains the car-centered development pattern of the outer neighborhoods (parking minimums, sidewalk parking, density limits which prevent the evolution of walkable centers).
We started out as a one-car household because I have a car-free commute in Chicago. I started on public transit, then switched to biking, and now have a few personal bikes, bikeshare membership, and zipcar membership. My partner has also started biking more and occasionally walking to work too. What started out as convenience and saving $$ for our household is now a conscious decision to maintain a low-car lifestyle and will impact future places we live or future career moves.
Hilariously, my small-town, Midwestern family is ever-convinced that I’ll need a car and offer to sell me an older family one every few years. They seem to be more at home sitting in gridlock on an expressway than pedaling through unobstructed bike lanes! Truthfully, I think there IS a generational shift happening as well, and I’m excited to see many of my fellow millennials eschewing the “need” to have a car.
I got into walking/using transit, now-peering-into-biking the same way. First it was cost/I don’t enjoy driving that led me to live in a place where I can take transit a lot, which led to getting rid of the car and only taking transit, which led to living in places where I can take transit and now am easing into biking. And now I’d only consider living somewhere where I have those options.
I don’t think for most people it’s a sudden, 100% switch. But the great thing about bike share and car share is that they give the opportunity for someone to be a “fair-weather” biker or transit taker until they get more and more hooked on those options (and less and less fair-weather about it). Many who are used to driving just don’t even have a sense of what they can do under their own power (hence when I lived near Navy Pier, I switched to saying it was “a 15 or 20 minute walk away” versus “a mile” because when I said a mile, people seemed to think it wasn’t reachable on foot). As you do more and more human-powered transit, you realize there’s more you can do.
And my family is the same My husband and I just finished our training and I can’t tell you how many times they asked what car we were going to buy when we were done, expecting a splurge on some luxury vehicle. They can’t get the idea that the answer is “none.”
We’ve lived in car-centric suburbia most of our adult lives. It all changes in just over 12 months. We will move to an area that is more connected and walk and ride bikes as much as possible. We plan to go to one car first and then, once we’ve adjusted, to zero cars. We’re already looking at adding a cargo bike to our growing fleet. We’re going to put a bike rack in the garage and use the extra space to work on bikes for all the other folks who will be joining us once they figure out what the’re missing. 🙂
We have about 3 generations of people who (mostly, with the exception of some urban dwellers) have never known a world where a car wasn’t absolutely necessary. It seems so weird until I head out into the ‘burbs and am reminded.
we had two cars – one relatively new family car (for spouse’s job and to get out of the city on the weekends), and a beater that I only used to take the kid to preschool in the mornings (I left it there and rode my bike the rest of the way). The beater was stolen a month ago… so we’ve been riding the bus to preschool and it’s actually not that bad – it’s a short walk to the stop (for a bus with 5-7 minute headways), we do have to transfer, but we have a choice of three different buses that takes us right there – there are usually other kids on the first bus because it passes by two elementary schools on the way to a major transit hub – plus, the school is near a bikeshare station, so I just hop on one of those and ride to work (I can take the subway if the weather is really bad).
Have been thinking about getting another car, but it would just sit on the street most of the time – I’m thinking a better investment would be a zipcar membership – since there are a few of those around the corner too… I’m in no rush – especially as winter is looming. digging out one car that is in our one off-street spot is going to be a lot easier.
Yeah I have flirted with selling my car for years, but my family was horrified about it. The car was paid off and not costing me a lot so I hung onto it for a long time, but I just unloaded it and now we just have one car. So far it’s been NBD. Part of the reason it works is because I telecommute, we both bike a ton and Cleveland recently got Uber.
Otherwise known as the family car share
We’ve been a two-car household since we got married almost five years ago. We are in the process of selling one of ours now that I can use transit/bike to get to work. It’ll be a great feeling when it sells!
Three years ago we went to a single-car household. My wife took a new job two blocks from our home, we bought a used scooter, and have a transit pass. We also have bikes, but primarily for recreation and short trips to the store.
According to this document, KPMG predicts that there will be more than 1,000 vehicles owned per 1,000 people in the year 2030 in the US. That is an increase of about 100 cars per 1,000 people from today. This estimate goes against every other piece of data I’ve seen about millennial and baby boomer transportation habits and the increase in bicycle commuting.
going back 100 some years, every generation has moved out of cities after they got a little older and started to have families. if not outside the city limits, then outside the city core since 100 years ago the political boundaries of a lot of cities had lots of farm and rural land
Of course it’s hard to speak for every member of a generation but the interesting thing is that in general even the oldest millennials (roughly those born around 1980 making them 35 next year) with kids still seem to be staying in more walkable environments at higher rates than did the 35 year olds of the 80s (Boomers) when the car-centric very unwalkable exurbs exploded.
Sure, not every millennial who currently lives here:
http://www.thetransitcoalition.us/a_better_inland_empire/images/webgraphics/SanFranciscoApartment-Sanfranman59-CCBYSA.JPG
Will continue to live there once they start a family (though some will). But that doesn’t mean the only other choice is this:
http://www.youjustmademylist.com/wp-content/uploads/2009/03/ugly_houses_sprawl.jpg
Many will end up picking one of the many many in-between choices, such as a single-family home in a walkable small town or a rowhouse in an inner suburb or even a new townhouse in a “retrofitting suburbia” development, as was done with Denver suburb Lakewood’s mall:
http://image.slidesharecdn.com/dunham-jones-retrofit-suburbs-130725135916-phpapp02/95/retrofitting-suburbia-40-638.jpg?cb=1374867764
Lakewood is still a suburb, but this part is a much more walkable one. Most people there probably still have a car, but if you live in an environment like that you may find over time you don’t need that extra car so often or at all.
That’s what’s driving this trend.
Boomers are doing it, too. As they approach retirement not as many Boomers appear to be idealizing this lifestyle as did their parents:
http://cache2.asset-cache.net/gc/128592419-sun-city-west-arizona-with-man-made-lakes-gettyimages.jpg?v=1&c=IWSAsset&k=2&d=9zdf5dMIt6r1Zv8ZdNUxVL%2FsdjSWKTlkbd7mLWK5wt0%3D
More are going to be choosing places where they can do this at least part of the time:
http://livefromsouthmain.com/wp-content/uploads/2010/09/Buena-Vista-Colorado-Farmers-Market-5.jpg
If grandma and grandpa can bike or walk to get around for daily things they may decide they can just share one car and use it rarely, just as many of their millennial children and grandchildren are doing.
Of course, some never left their walkable environments in the first place:
http://www.theepochtimes.com/n2/images/stories/large/2012/05/03/72212955.jpg
I’ll be interested to see to what extent that trend continues into the future. In my case, as my daughter started elementary school we stayed in the city center, sold one of our cars, and we’re not alone.
What about the other 99% who don’t live in gentrified urban neighborhoods ?
Zipcar, Uber, and bikeshare are available in far more places than just “gentrified urban neighborhoods” already. In particular, you can find them around a lot of universities. I just zoomed in on Zipcar’s offerings in Texas, and while I can’t find any around Texas A&M in Bryan/College Station, they do exist around UT-San Marcos, and Baylor University in Waco, in addition to the obvious parts of Austin, Dallas, Houston, San Antonio, etc. And all of these services are still expanding. Surely the plan right now is to get college kids hooked, and then over the next few years use them as a target audience to figure out which neighborhoods to expand to.
That’s really strange. I had to click through to find that figure on p. 12 of their report. It doesn’t seem to work well with the numbers indicated in the chart here, which indicate a decreasing total number of cars (surely with an increasing total number of people). Also, it’s really hard for me to understand a scenario in which there are more household-owned cars than people. Maybe they’re counting corporate fleets as well as personal cars? It’s also possible that that chart just uses a very naive prediction (it seems to be linear after the present) while the one focused on in this post is more sophisticated.
In addition, it’s important to note that people deciding to live in even moderately walkable places is a huge part of what’s furthering the decline of two-car households. There are lots of at least moderately or very walkable places that are not crazy expensive. The article cites the example of the couple living 1.5 miles from central Lawrence, Kansas.
And re: those places that are more expensive, more gentrified neighborhoods, some couples may be finding when they’re not spending all that extra money on maintaining dual two-car driving-everywhere lifestyles they can actually afford more expensive housing costs the less they drive.
My children grew up in the third generation of a one-car family. Like my parents, I settled in a walkable neighborhood near rail and bus transit. I told my husband before we bought our house that teenagers are much more independent and happier when they do not have to be driven everywhere. Even better, we did not have to worry that a drunk or distracted 17 year old was driving one of our children somewhere. My kids are such transit fans that anything less than a NY or DC level of service seems archaic to them.
Easy enough for a couple or family to live with one car, as long as the couple doesn’t have two jobs in diametrically opposed directions. I know dozens of people who live with one car, including myself (though I work from home, so there’s that).
I’m still living where a car is absolutely necessary, but honestly I can’t conceive of two cars being absolutely necessary.
We drive from our suburban house into “town”, and then can go our separate ways from there without a car.
I think the only thing which can require two cars is job sprawl.
Or when both members of a couple work at jobs which are within walking distance *of each other*. So, if two people have jobs which are both in downtown San Francisco, even if they live out in a car-dependent area, there’s no reason to have two cars, they can drive in to work together.
GM used to make trams. They deliberately shut down tram systems because they made more money selling buses. Buses wear out sooner and have to be replaced more often, you see. 🙁
No, they really don’t have a chance. Secondhand smoke is a thing; the secondhand smoke rules are applied to cannabis as well. They will never restore their “toxic smoke everywhere” environment of the 1950s, thank goodness.
GM did not make trams. They (along with several other companies) backed National City Lines, which did buy up transit operations and replaced electric railways with buses in most cases. One advantage that GM had was that they could provide in-house financing for buses, while the streetcar builders had to rely on equipment trust certificates, which had higher interest charges. Buses were better collateral for financing than streetcars because they weren’t nearly as specialized. This is just a brief summary–the whole story takes several pages, if not a whole book.
My apologies for the error in detail. Here’s the point I was thinking of: GM owned Electo-Motive Corporation. They initially made diesel-powered “motor cars” for railroads which were, among other things, used on interurban streetcars. (Eventually they ended up only making giant diesel locos, and then GM sold them entirely.)
GM proceeded to undercut EMC’s market and made a point of competing against railroads as well as against streetcars. Because buses were more profitable…
…though also because the National City Lines conspiracy wasn’t just GM, it was also Firestone, who depended on rubber tire sales.
Never underestimate the power of marketing and PR.
I don’t see anything in your comment about WW2 pilot training, turbine engines, the FAA, jet travel, airports, etc. So, I conclude you have an agenda…