US New Car Sales Projected to Drop by Over 2 Million Units by 2040

"From 16 Million to 14 Million: Sharp Decline Predicted"

"Stricter Immigration Policies Expected to Weaken Demand"

"Expansion of Autonomous Driving Will Further Reduce Car Ownership"

Reuters Yonhap News

The U.S. automobile market is undergoing structural changes due to factors such as population decline and the expansion of autonomous driving technology, and it is projected that annual new car sales will decrease by more than 2 million units by 2040. As the world’s largest automobile market, a contraction in U.S. demand is expected to have negative repercussions for the global vehicle industry as a whole.

According to CNBC on the 28th (local time), management consulting firm Bain & Company forecast that the annual number of new car sales in the United States, currently at around 16 million units, could fall below 14 million by 2040. The analysis suggests that rapid demographic and technological shifts will drive a swift contraction of the automobile market.

Mark Gottfredson, automotive advisory partner at Bain & Company, told CNBC, “Last year, the total fertility rate in the U.S. was about 1.60 children per woman, which is below the replacement rate of 2.10. Until now, relatively high levels of immigration have offset this shortfall,” adding, “However, stricter immigration policies over the next 15 years will halve the net immigration rate over the next 20 years, significantly reducing automotive demand as well.”

In particular, demand for vehicles among young adults—historically a key consumer segment—has dropped sharply. According to S&P Global Mobility, the share of new car registrations by Americans aged 18 to 34 fell to 12% in 2021, following the COVID-19 pandemic, and dropped further to around 10% last year. Currently, more than half of new car registrations in the United States are by those aged 55 and older.

Rising vehicle prices are also dampening consumer demand. According to market research firm Telemetry, monthly installment payments for new cars in the U.S. have risen by 30% over the past four years. For one out of every five new cars, the monthly payment now exceeds $1,000 (about 1.5 million won).

Advances in autonomous vehicle technology are also contributing to a decline in both the number of drivers and cars owned. Sam Fiorani, vice president at AutoForecast Solutions, told CNBC, “Younger generations are more likely to use Uber when they need to get around. Even if people enjoy driving and want a new car, fewer can actually afford it.” If robotaxis become mainstream within the next 15 years, the rate of driver’s license holders is projected to fall by 2-3 percentage points from current levels, and the number of cars owned per driver will decrease from 1.2 to 1.1.

This sharp contraction in demand in the U.S. market is expected to negatively impact the entire automotive industry. Partner Gottfredson stated, “The automotive industry is no longer a growth sector, but a declining one. As we enter a phase of structurally reduced demand, competition among manufacturers will inevitably intensify, leading to further market consolidation.”

This content was produced with the assistance of AI translation services.