The US auto market is declining amid demographic shifts and changing consumer behavior, according to an analysis. A forecast also emerged that annual new car sales could fall by more than 2 million vehicles within the next decade or so.
On Monday, US broadcaster CNBC, citing a recent report from consulting firm Bain & Company, reported that annual new car sales in the US are expected to fall by more than 2 million vehicles from current levels by 2040. Bain & Company cited slowing population growth, rising vehicle prices, and diversifying transportation options as reasons for the contraction in the auto market.
According to Bain's analysis, the US has offset declining birth rates through immigration, but restrictive immigration policies are expected to continue over the next 15 years, which will reduce auto demand. Mark Gottfredson, a Bain partner, told CNBC that "the auto industry is no longer a growth industry but a declining one," adding that "it faces decline especially at a time when technology is disrupting everything."
Rising vehicle prices are also leading more young people to forgo buying new cars. According to S&P Global Mobility, the share of people aged 18 to 34 in US new car registrations fell from 12% in the first quarter of 2021 to less than 10% by mid-2025.
According to analysis from auto market research firm Telemetry, monthly installment payments for new cars in the US rose 30% over four years, and one in five new cars carried monthly installment payments exceeding 1,000 dollars (about 1.5 million won).
Bain analyzed that if robotaxis become widespread and cheaper within the next 15 years, the share of the population holding driver's licenses could fall by 2 to 3 percentage points from current levels, and the number of vehicles per driver could drop from 1.2 to 1.1. This means one or two out of every 10 US households could reduce their vehicle holdings by one going forward.
Longer vehicle lifespans are another factor reducing new car purchases. According to the Bain report, the annual vehicle deregistration rate in the US fell from about 6% in 2000 to 5% in 2025. Bain projected this rate could decline to 4.4% by 2040.
Mark Gottfredson, the Bain partner, said "competition in the US auto market will become more intense," adding that "there are too many automakers and brands competing for consumers, and the market will inevitably consolidate."
Eight in 10 Europeans: 'A Car Is a Luxury'
This is not just a US story. As the cost of buying and maintaining vehicles has surged, a poll found that eight in 10 Europeans consider a car a luxury item. France's BFM TV recently reported that this trend emerged in a survey by polling firm OpinionWay of 7,036 people across seven European countries: France, the UK, Italy, Belgium, Germany, Austria, and Spain.
According to the survey, 80% of respondents said they now consider personal car ownership a luxury due not only to purchase costs but also maintenance and repair costs and surging fuel prices. This figure rose as high as 86% in France.
As the burden of buying new cars grows, "refurbished used cars" that have undergone quality checks and maintenance are emerging as an alternative in the European market. Currently, 73% of French people said they had heard of this market, up 10 percentage points from 2022.
