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U.S. Fleet Shrinks, As More Vehicles Go To The Crusher

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Car Crusher by Flickr user wilkesjournal

Car Crusher by Flickr user wilkesjournal

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For the first time since Word War II, the annual number of vehicles scrapped exceeded the number of new vehicles sold.

That’s solemn news for the auto industry. U.S. vehicle sales had been in a sustained boom period of 15 to 17 million vehicles per year from 1994 through 2007. And the size of the fleet has been on the rise, with only a few wartime hiccups, for a century.

According to the Earth Policy Institute (EPI) post that kicked it off earlier this week, during 2009 about 14 million vehicles were retired, while only about 10 million vehicles were sold—effectively shrinking the U.S. fleet by a very significant 4 million vehicles, or about two percent of the total fleet, down to 246 million.

The EPI attributes many reasons for the shift, including urbanization, congestion, economic uncertainty, petroleum uncertainty, gas prices, concerns about climate change, and disinterest in automobiles among young people. Also cited: improvements to mass-transit systems, higher parking fees, and unwillingness to take on long-term debt (even when it’s available).

Here’s where it gets interesting. Assuming a vehicle life expectancy of 15 years, the first vehicles from the sales boom that really kicked in around 1994 will be retiring about now, so EPI projects that scrappage rates will be higher than sales for the next ten years or more—with a total fleet decline of ten percent, to a total of about 225 million vehicles.

But above all, simple market saturation might be just as much to blame. According to the organization, there are 209 million licensed drivers for 246 million vehicles. And you can bet those 37 million vehicles aren’t future-minded electric rides like the 2010 Tesla Roadster, or for that matter garage queens like vintage Gullwings or split-window Corvettes. Nope, most of these surplus vehicles are just past their years of steepest depreciation but have plenty of service left. Cash for Clunkers added as many vehicles as it took out of service, so the affects it had on fleet size are debatable.

And while the end of the year finished on a positive note, as Marty Padgett reported earlier this week in his sales analysis, Reuters also summed that U.S. auto sales were at their lowest raw numbers in 27 years.

Looking at all these factors, however brief this snapshot might be, it’s tough to imagine sales bouncing back to where they were just a few years ago anytime soon.

Do you think an industry migration to electric vehicles, or at the very least more fuel-efficient vehicles, could give auto sales the burst of life they need? Let us know what you think.

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