Posted Wednesday, Sept. 26, 2012, at 3:18 PM
Everyone knows that auto sales over the past few years have been much lower than they were back before the financial crisis. That seems like a cyclical phenomenon, but people also wonder if it's tied in to larger shifts in demographics, taste, or transportation patterns. Duncan Black points out, for example, that per capita vehicle miles traveled actually peaked in 2004 well before any sign of recession.
Something that I discovered more recently screwing around with FRED charts is that this decline has arguably been longer in the making than people realize. Here's a chart of millions of cars sold divided by thousands of net new people. You can see that it's a very cyclical kind of thing—the population keeps growing pretty steadily, but the car sales collapse and rebound:
That looks to me, however, like a downward drifting trend since the mid-eighties. And unfortunately the data only dates to the mid-seventies so it's difficult to know what was happening before that. It's hard to know just from these numbers how much of the issue is increased durability and longevity of cars and how much of it is an actual declining appetite for the vehicles. But the apparent steadiness of cyclically adjusted light vehicle sales over these decades is in part an artifact of population growth—and with population growth slowing that may mean a domestic auto market that doesn't really fully recover the way people are expecting.