Friday, December 2, 2011

Two Trends in Auto Ownership

The Wall Street Journal has two stories today (both gated) about trends in auto ownership. The first (link here) is about the decline of auto ownership in Japan. The intro:
You wouldn't know it from the buzz ahead of this weekend's Tokyo Motor Show, but Japan has fallen out of love with cars.
The country's domestic auto sales have fallen in eight of the past 10 years. Demographics are part of the reason—the population is shrinking while more people are living in cities and riding public transit. 
The second story is about the resurgent sales of SUVs in the US. From this story:
The sport-utility vehicle is making a comeback.
After being largely shunned during the recession, high-riding SUVs and workhorse pickups are regaining favor as U.S. consumers grow more confident and fuel prices remain below the $4 a gallon level that triggered a shift away from larger vehicles.
The rebound was clear Thursday as U.S. auto sales in November hit a 13.6 million annual pace, the strongest in more than two years, with sales of trucks and SUVs surpassing cars at many auto makers. The results are boosting Detroit auto makers that suffered when gas-guzzlers got the cold shoulder in 2008.
There are two distinct trends in these stories. The first is that there is a shift away from auto ownership for many people, not just in Japan, and primarily younger people. We do not know precisely why this is occurring, but it likely has more to do with the cost of autos than the provision of transit. Cars are expensive, especially for a generation whose income has not increased much over the past twenty years. The other trend is that there really isn't much evidence that US consumers are turning toward small cars when they decide to buy cars. I've posted about this before. Americans may be driving less, and fewer may be buying cars, but when they do buy cars they still like big ones.

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