By on January 5, 2010

Not a whole lot. Picture courtesy nocaptionneeded.com

2009 sales of light vehicles (cars and light trucks) in the United States came in at the bottom end of the estimates. Americans bought only 10.4m units, the lowest level in 27 years, Reuters reports.

America actually lost some 4 million cars. The United States scrapped 14m autos while buying only slightly over 10m last year. Cars on the road dropped to 246m from a record high of 250m in 2008, says a report to be released on Wednesday by the Earth Policy Institute (EPI), cited by Reuters.

Lester Brown, the president of the EPI, fetes this blip as the United States entering “a new era, evolving from a car-dominated transport system to one that is much more diversified.”

Not so fast. The U.S.A. still has some 800 cars per thousand pop, vastly more than the rest of the world. Car density in Western Europe hovers in the 500s.  There are approximately 50m more cars than  licensed drivers in the U.S.

The quickly aborted cash for clunkers program removed only 700,000 vehicles from American roads. By government decree, they were immediately replaced with new ones.

Update: Complete set of 2009 data here in handy Excel format Refer to TTAC’s roundup of 2009 sales data for a continuously updated roundup of 2009 sales data from around the world.

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31 Comments on “U.S. Car Sales In 2009: Worst in 27 Years...”


  • avatar
    mtymsi

    Despite GM and Chrysler being themselves the major cause of their bankruptcies and bailouts this annual sales level was the final death knell for both. Had the annual sales level been anywhere near 16mm I don’t think either would have gone through bankruptcy.

  • avatar
    gslippy

    Any estimate on what US sales would have been without CFC?  Maybe 10.0 million?

    The numbers are worse when you consider that the US population was 25% smaller in 1982.

  • avatar
    th009

    It was only three and a half months ago that Mulally predicted a total of 11.2M for the year …
    http://www.thetruthaboutcars.com/ford-ceo-alan-mulally-u-s-sales-to-finish-2009-at-11m/
     
    But what’s a million cars between friends, right?

  • avatar
    trucosm

    ugh, damn lazy ass use of statistics.

    I wish someone would crunch the numbers and divide the 10.4 mill cars by the total adult population to get the “per capita” buying rate. I’d do it right now, but I’m too lazy, lol.

    Obviously in 1980, there were less than 300 mil. Americans…..so the 2009 per capita car buying rate could well be the worst since sometime during the WWII new car production freeze.

  • avatar
    toxicroach

    I’d view it more like ez credit pulled a lot of sales forward over the last decade, and until that excess capacity works its way out of the system, sales will continue to be low.   I’d bet that if you did an per capita car buy rate for the 80s and the 00′s, the 00′s would look pretty good.  Just guessing though.
     
     

  • avatar
    davejay

    th009: It was only three and a half months ago that Mulally predicted a total of 11.2M for the year…But what’s a million cars between friends, right?

    According to the link, he predicted “about 11 million”, not 11.2M, and so the numbers were only short of his prediction by 0.6M (5.5%), a lot closer to half a million than the full million you rounded up to. Just sayin’.

    • 0 avatar
      Disaster

      Plus, Ford actually did better than other manufacturers…like GM and Chrysler, so he might have mis-estimated based on their success.

    • 0 avatar
      th009

      True, checking the number, it was “11M”, not sure where I got 11.2M.  Sorry about that.
       
      But it’s not off by 5.5% as the difference is all over the last four months of the year (he made the prediction in September), it’s closer to 15% off over those four months.

    • 0 avatar
      Steven02

      So I guess Mulally doesn’t have a crystal ball.  Who cares if the last 3 months weren’t as good.  Ford is doing pretty well right now under his leadership.  But knock him for being off on a prediction.  He has only turned around that company.

  • avatar
    John Horner

    At the beginning of last year I said that I thought the year’s sales would end up in the 10-11 million unit range. My argument was simple: People had been buying way more vehicles than were getting scrapped. The US car market is basically a replacement market. Sales would have to trend below the scrap rate for a time in order to burn off the excess inventory on our roads. The scrap rate had been around 13 million units per year. We are not going to see a return to 16 million or more units per year in the US anytime soon, and maybe never.

    The US driving age population is growing slowly, if at all. Plus, as the average age of the population goes up, the amount of driving done per person goes down. Also, the trend towards urban living continues apace, and people living in Manhattan like environs don’t need (or often want) to own cars. There was a lot of overbuying in the naughties and it is going to take a few years to work of the excess inventory.
    The only thing which surprised me this year is that the scrap rate spiked a bit higher than it has been. A goodly number of people must be thinning the family fleet. Speaking of which, we have 2.5 times as many vehicles as we do drivers in our family ;). I really should unload a few of them.

    Finally, much of the younger generation today just isn’t that into cars. Considering the costs and risks of owning one I can understand why.

  • avatar
    HerrKaLeun

    I think the reduction in cars mainly is due to people not being able to afford 2nd and 3rd cars. I don’t think someone who needs a car will give it up.
    When I came to the US first I was surprised how even low income folks have several cars (well, several clunkers in that case), more than they have drivers in the family. Rich people have more anyway. In Germany wealthier people have a more expensive car, but very rarely a 2nd car per driver.  So there still is much buffer when it comes to shedding cars without affecting people’s ability to drive to work etc.
    The average age of the carsin the US  is pretty high since most states don’t have emission/safety inspections that take them out of commission.  those inspections (plus higher registration tax for older high-emission cars and high gas prices) are responsible for a higher turnover of cars in Europe.  a 12 year old in Europe probably still is fine to drive, but bringing it up to meet all tests, the higher tax and worse mileage make the owner tend more to a newer car.

    • 0 avatar
      ClutchCarGo

      When I came to the US first I was surprised how even low income folks have several cars (well, several clunkers in that case)

      If your car is unreliable, and you can get fired for failing to show up to work, you have to keep spares on hand to ensure something can get you to your job.

  • avatar
    Disaster

    Car sales were down because people couldn’t afford them…and they will continue to not be able to afford them as long as the unemployment rate stays high.  As was mentioned, young people aren’t finding jobs and aren’t willing to take on a new car payment. I suspect next year will be as bad as this and you will see more losses…and possibly even layoffs, at the car companies.
     
    Ford will go from darling to pariah when they find themselves not able to service their debt and have to finally go to the gov’t for help.  I wonder if the people will be so willing to help…after dumping billions into the banks and GM and Chrysler.

    • 0 avatar
      mikey

      Disaster makes a valid point concerning the young folks. It’s not only young people that are not willing to take on a car payment. Many of us babyboomers were either forced or have  chosen to retire. I’ve said this before. In my socio economic group,a whole lot of us former new car buyers,have puchased our last new car. IMO this is a part of the market that will not come back.

    • 0 avatar
      Disaster

      Your point is good too.  We baby boomers went from getting new leases every two to three years to purchases (including used) over the last few years.  We bought what I expect will be our last new car purchase for years to come, in December.  In retrospect, I wish I had half that money back from those lease car payments.  We really bought into the “American dream” but won’t be doing that again.

  • avatar
    menno

    I’m right with you, Mikey.  I just got rid of my 2008 Prius (E10 murdered the mileage plus Mrs was getting increasingly nervous about the imbecilic drivers / “dangerous vehicle aimers” on the roads around us).  Due to the fact that here in Michigan, a) the state is essentially bankrupt b) the state has as much as come right out and said the road cleaning would be getting less attention again c) after a storm just before Christmas, my road wasn’t plowed for THREE DAYS – this is a road between a US highway and a town, a major roadway – so I took the hint. 

    Got my last new car (until retirement in 10 years???) – a 2010 Subaru Legacy.  Wanted all wheel drive, large enough vehicle to feel safe, built in the USA, large enough for two Newfoundlands (hey, if they can ride in the back of a Prius, they can ride in the back of a Legacy sedan which has more room).  The cool thing about the Legacy was – up to 31 mpg highway (US figures) with the CVT automatic.

    I was set to go buy a Santa Fe SUV (18 mpg) on the Saturday and Friday night, did some final research online at home and discovered the Legacy CVT mpg’s which are 5mpg better than the manual shift car. 

    Thus far, the MPG’s are phenomenal.  Up to about 31 mpg!  The Prius had deteriorated from 44mpg winter time to 33 to 38 mpg in the winter time on E10.

    Anyone else notice how Honda recently lost a class action lawsuit over the MPG’s of their hybrids?  Here’s the skinny:  The EPA (federal gov’t) demands that car companies ONLY use EPA numbers when advertising mileage.  The fed gov’t has put into place a tax relief for E10 fuel which essentially means (at least where I live) that you can’t find any “real” gas any more.  The E10 fuels obviously caused my Prius hybrid MPG’s to go down and I strongly suspect the same happened on Honda hybrids too (as well as all other vehicles – my wife’s Sonata lost about 6% MPG”s when E10 came along). 

    So Honda gets sued and loses due to MPG of their hybrids not being as good in real life any more as the EPA mandated numbers!  Does this make any sense to anybody?  When did I wake up in the Twilight Zone?!  I think the world has gone insane! 

    My wife and I are set until retirement and possibly beyond.   A new 2009 Sonata and a new 2010 Legacy.  Each are capable of 200,000 to 250,000 miles plus and at retirement in 10 years we’ll get a new vehicle – probably our last ever. 

    Could have been vastly different.  I’ve bought MANY cars over the years.  No more.  I’m saving my money, now. 

    • 0 avatar
      mikey

      Right you are menno, your thoughts, and  plans mirror thousands if not 100s of thousands of former new vehicle buyers. The impact this is going to have on the car/truck buisness in general will be unprecedented. Repair shops,junk yards,and the parts buisness  are booming right now.

       BTW  Did you a do little detail job on the Prius before you traded it? I’m thinking Newfoundlanders….slobber, hair,paw prints…..large paw prints. 

       Good luck dude….It’s good to know some of the old TTAC guys are still out there.

    • 0 avatar
      John Horner

      Watch what people do, not what they say. When people say they are never buying another new car, yet just recently went out and bought one, I’m skeptical.
      People said they were going to cut back on shopping this past Christmas, yet retail sales numbers came in higher than they were the year before.
      People say what they think they should be saying, but often actually DO something different.
      BTW, I’m no different from others in this regard. Years ago I said I would never move to California for work, and then did. Later I said I surely would never move to Texas to continue by career, and then did. Things change, views change. Actions are far more telling than words.

  • avatar
    mtymsi

    Another factor to consider in the dismal sales numbers for last year was the lack of financing and leasing programs for most of the year. You had a number of willing buyers that simply couldn’t obtain financing. As the credit markets slowly continue to loosen that will aid sales. I believe around 20% of annual sales are leases and many leasing programs returned in the last quarter. The lack of financing/leasing artificially lowered the sales figures last year.

    • 0 avatar
      menno

      It’s not as bad as the worst-case scenario that I was concerned about. 

      Imagine this:  NO CAR LOANS AVAILABLE AT ALL. 

      What would new car sales have been in the United States if that’d been the case over 2009? 

      1 million?  1/2 million?  Fewer than 1/2 million? 

      Essentially, if the economy switches over from “credit oriented” (“buy it now / pay over time”) to “savings oriented” (“save for it then buy it when you have the money”) – the timeframe during which the change-over occurs (i.e. paying off  prior debts then starting to save for the next big purchase) would take almost a DECADE for large purchases such as cars and SEVERAL DECADES for housing. 

      YET – the reality is, it’s only been a relatively short time in terms of how long humans have been on earth, that buying “on time” for virtually everything has been considered the norm.  Under 100 years. 

      My own grandfather bought his first ever car, a new 1925 Model T, with cash money.  The Ford salesman drove it out to the farm, taught him to drive, then apparently walked about 8 miles to the train station to get back to town. 

      My own father bought his first ever new car, a new 1950 Ford six (“radioheateroverdrive” was practically one word…)  with cash money.  

      I bought my first ever new car, a 1975 Ford Pinto, on time.  

      My sons have never managed to buy a new car. 

      See the progression (or shall I say, regression)? 

  • avatar
    snabster

    I was reading something about WW2 the other day.  How the domestic car industry geared up for war production.   The USA made about 4 million cars in 1940, which is roughly similar to what we make now.  Probably more than half are made by foreign owned companies.
     

  • avatar
    Rday

    I agree with Mikey. The days of the high volumes sales will not be coming back. I bought a new van this year because I had the cash.  And I can  write some of it off as a business vehicle. With unemployment so high and consumers now wanting to save more money than spend it on rapidly depreciating vehicles, I think buying habits have changed permanently. As a nation we can no longer ‘afford’ the multiple vehicles per family or the rapidly increasing cost of gasoline.  And with gas projected to go higher, those companies with reputations for ‘gas sipping vehicles’ will reap the benefits. Eventually I think we will mainly drive electric vehicles.

  • avatar
    Steven Lang

    Let me throw a few numbers out there for this discussion.
    In 2008 there were 250 million cars in the USA.
    Think about it. Each person of driving age and capability likely already had a vehicle and change. A two person family more than likely had three vehicles to choose from.
    Flip this around to America right up to the early 70′s where the average American household more often than not only had one car.
    You now have a massive number of vehicles out there, since the early 90′s, that can reach a lifespan of 20 years plus if they’re driven responsibly and well taken care of. Even the lowliest of cars these days should easily last over 15 years if they’re not abused.
    A 2006 Chrysler PT Cruiser, silver, only 30k miles, sold for $4500 at a recent sale of mine. The last bidder was at $4150. It took a long minute of cajoling to get that deal done and that vehicle was spotless. When you adjust for inflation that price is probably less than two thirds of what it cost to buy a new Yugo back in the late 80′s.
     
     
     

  • avatar
    brettc

    My wife and I bought our first new car together in 2001, a Hyundai Accent. The only other new car I’ve purchased is a 2003 Jetta, which I plan to keep until 2015, or maybe longer. I’d love to go out and buy a new Jetta TDI wagon, but I don’t actually need one. I definitely don’t want or need a car payment. I think a lot of people have slowly realised in the last couple of years that wants don’t equal needs and have finally adjusted their lifestyles. Plus not having a job doesn’t help people either.
    Car companies are just going to have to adapt to the new annual sales rate, and in the U.S., states are likely going to have to keep cutting services back as new vehicle revenue drops. In 2003, I had to pay about $450 in excise tax when I first registered my $18000 Jetta. I can’t imagine buying a $50000 vehicle and paying the fees for that, but a lot of people did it because of abundant, easy credit. It wasn’t “real money” anyway, it came from HELOCs for a lot of people courtesy of overinflated home values.

  • avatar
    Mark MacInnis

    What we are seeing, which hasn’t been mentioned yet, is the impact of the end of the  “EZ lease” on new car sales/production.  During the heyday of easy leasing (early 90′s to 2007) the OEM’s could pretty much bank on 3 to 4 million sales a year coming from lease renewals.  The returned cars were artificially pumped into the used car market, totally skewing the economics of car ownership for a long time.  Since leasers “bought” on monthly payment, and the OEM’s and their related finance arms manipulated the residual values, the OEM’s could continue to jack up price and justify high-content and just pour it into the showrooms.  Boom!

    But now, leasing has withered, and we are back to selling cars the old fashioned way, the way perhaps we should have been all along.  Save up enough for a 20% down payment.  Establish a credit history and get bank financing.  Buy a car that will fit your lifestyle, not just now, but for the 6 years it will take you to pay for it.

    This leads to more conservative buying decisions, more thoughtful decisions.  Smaller cars with fewer options, since we are now paying for the whole car now, not just 30% of it.  People just won’t go out on a whim and sign for a convertible or SUV because they gotta have it…..knowing that if it doesn’t fit their lifestyle, or if their circumstances change, “it’s only a three year commitment.”   The car commitment is, and will be, longer-term now for most of us.

    In short, cars appear to be assuming a more utilitarian and purposeful, less bling-and-lifestyle-statement, role in peoples lives these days.  Good for consumers.  Bad for the OEM’s, who will have to radically change their business models to deal with the new cultural reality of car ownership. 

    The party of the 90′s and Oughts is over.  Time to grow up.  Responsibility and austerity are the new profligacy.

    I’d like to see a graph of new car sales per million US drivers over the years.  I’d bet it would show a sizable “bubble” during the leasing heyday, and that currently we are at a lower-than-average rate.  The ‘recovery’ (my nominee for most over-used word this year) will be gradual. We won’t see 16 million new car sales again until the driving population at historical purchase demographic rates supports that many sales.  Maybe not ever, as the big driving boomers start to downsize to one-car families or stop driving altogether…..

    So, for the OEM’s it’ll continue to be the cut-throat game of musical chairs…..make a profit and service your debt from a smaller volume, go out of business, or merge.  Surprisingly, I think Ford won’t survive (despite the “right” things they are currently doing market and productwise)…..unless they follow GM and Chrysler to the bankruptcy court and the government dole to eliminate their debt service.  Chrysler won’t survive either.  GM will be the last domestic standing…..(I’m 180 degrees from my thinking last year on this one.)

    • 0 avatar
      John Horner

      +1 to everything you said, except the bit about Ford being the problem child. Ford still has good positions in many growth markets and should be able to continue riding out the storms. Ford also doesn’t play heavily in the poser market, oddly because Lincoln is such a damaged brand. Less exposure to the move away from bling and back to sanity.
      In fact, Ford’s most promising vehicles all play to the what you need buyer. The Transit Connect is a perfect example.
       

    • 0 avatar
      Mark MacInnis

      Thanks JohnHorner…..you may be right, on third thought, about Ford.  I hadn’t considered fully the product thing they’ve got going on.  But they need to avoid more missteps like the misbegotten uglification of the Flex done by Lincoln….if they can keep or increase their current market share, and get and keep the UAW in line, they may survive.  But if we have a double-dip recession, all bets are off….

  • avatar
    Andy D

    If you are worried about losing your job, would you buy a new car? Or any non-essential purchase?  That is what happened in ’09

  • avatar
    craigefa

    Saying car sales will never make it back to the 16 million mark is overly pessimistic. There was no legitimate reason at the time for so many cars to be sold; the economy was simply humming and people had excess cash. Those times will come around again. The early 80s seemed pretty bleak and we came out of it. The early 90s was a jobs wasteland and that flipped in the late 90s. There were a lot of people who said they were forever changed by 9/11 that ended up part of the mid-decade boom. Things change.

    • 0 avatar
      mtymsi

      I completely agree with you. The current numbers are a result of our perpetually cyclical economy and the current recession was particularly harsh. I believe eventually both the economy and historic auto sales levels will return in several more years. I don’t at all foresee the current numbers becoming the new normal rate. There are too many negative factors involved in the current sales rate none of which will be permanent to base future annual sales rates on the current rate.

  • avatar

    Have a look at this chart.


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