Two-car households may be on the decline as urbanization increases, but they are far from disappearing, a KPMG report said this week.
Fifty-seven percent of U.S. households have two cars or more, the accounting and consulting firm said. But, as people flock to cities, that number may go down to 43 percent by 2040, said Gary Silberg, national automotive industry leader for KPMG and author of the report.
“In 25 years to drop around 15 points is not a lot because of the revolution going on in the automotive ecosystem,” Silberg said. “And with the trend of urbanization … we think that number over time … could even be lower.”
Urban areas will add 2.5 billion residents by 2050, with the percentage of the world’s population living in urban areas expected to reach 66 percent by the same year, this year’s World Urbanization Prospects report by the United Nations said.
With more people living in urban environments, where ridesharing is becoming more common, will car ownership decrease? KPMG predicts it will.
In cities in California and Texas, the proportion of two-car households doesn’t stray more than 11 points from the national percentage. San Diego is even above the national number, with 58 percent of households having two or more cars.
But in New York City, Chicago and Philadelphia, most households have fewer than two cars. Just 14 percent of New York City’s population lives in a two-car household, while 29 percent of Chicagoans do. In Philadelphia, 23 percent of households have two or more cars.
“Mobility on demand,” such as rideshare companies Uber and Lyft, is slated to increase to 10 million vehicles by 2040, KPMG’s report said.
“If mobility grows on demand, demand for ownership will decline,” Silberg said.
“But we don’t think the two-car family is going away,” he said.
Car ownership will still dominate, with a projected total of more than 225 million household cars by 2040, factoring in the ridesharing increase that KPMG predicts. If household car ownership remains “business as usual,” Americans will own 255 million vehicles in 2040. KPMG forecasts about 215 million owned in 2015.
U.S. new light-vehicle sales will top 16 million units annually until at least 2018, Steven Szakaly, chief economist of the National Automobile Dealers Association, told Automotive News last month.
“But if the [number of two-car households] were to drop, it could have profound implications of the number of car sales,” Silberg said.
Automakers would need to think about demand differently, he said.
“What will consumers want if they don’t necessarily own the car?” Silberg said.
If ridesharing grows to millions of drivers, the companies could make up a network that approaches an automaker, leading to much bigger negotiations than a single car buyer, he said.
Horsepower, for example, may be less important in this case. Infotainment systems may rank higher in importance, with rideshare customers looking for comfort and ease when using gadgets during their short rides.
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