Americans Love Their Cars, But Are They Willing to Share?

Car industry analysts try to assess the future of the market - will Zipcar and public transit change car ownership forever?

"In recent years Americans appeared to be hooked on it and took advantage of home equity loans, easy credit and cheap short-term lease deals to send new-car sales to levels of more than 17 million a year.

Now the market has collapsed by 46 percent to below 10 million, as people are making do with the cars they have, leaving the industry to debate - and worry - about what the new normal will be once the recession ends."

"People like Kate M. Emminger do not offer the carmakers much hope. Ms. Emminger sold her 2006 Toyota Corolla last April because she decided she could not afford her $250 monthly payment, even though she earns about $60,000 a year as a university events planner.

"It just became too expensive to have a car," Ms. Emminger said. Now, she volunteers at City CarShare, a nonprofit organization in San Francisco, in order to earn free use of its vehicles, which normally rent to members for $5 an hour plus 40 cents a mile. Otherwise, she takes public transit."

"If sales do pick up, carmakers eventually could be more profitable than they have ever been because of all the costs they have shed, said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

"After you rebound from this artificial low in demand, wow," Mr. Cole said of the potential for auto sales and profits. "

Full Story: Industry Fears Americans May Quit New Car Habit

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Comments

Irvin Dawid's picture
Correspondent

New Car Sales Not What They Used To Be

A follow-up article, New-Vehicle Sales Reach a 2009 High notes:
"The seasonally adjusted annualized selling rate for the industry was 9.91 million, the highest so far this year. Until 2008, automakers had been selling about 17 million vehicles a year for much of the last decade."

The good news for the industry was: "New-vehicle sales in the United States climbed to their highest levels of the year in May"; but the bad news : "demand is still below the levels that most automakers need to be profitable."
Irvin Dawid, Palo Alto, CA

Car Sharing

I use to own a car and when I moved to San Francisco I decided I didn't need one and sold it. I don't want to ever own a car again. I love the freedom of not having a car and enjoy walking through my neighborhood, it's very liberating. Of course there are times when I need to go out to suburban areas which requires me to drive because there are no other means of getting there. When such an occasion arises I use a zipcar which is a car sharing company. I love being a member of Zipcar because it gives me access to a car when I need it without the cost and hassles of parking a car that I would own otherwise. I recommend car sharing for anyone that lives in a city where car sharing is available.

But what if we just downsize?

The vast majority of drivers (and car owners) in the US can choose to drive a smaller, and less expensive, vehicle, or keep their current car longer. They can therefore keep their current travel patterns and adjust to fuel prices significantly higher than today without a lot of pain. Driving a car that's paid off really isn't that expensive, so long as you don't have to directly pay for parking...

Good Reason To Kill GM

as Michael Moore says in "Goodbye GM" http://www.thedailybeast.com/blogs-and-stories/2009-06-01/goodbye-gm/
"The only way to save GM is to kill GM."
Why waste $50+ Billion of taxpayers $$$ with all the trends stacked against this dinosaur? Moore says, the feds should keep all the GM employees working by retooling GM plants to build rolling stock for a greatly expanded network of high-speed, light rail and PV, Wind power equipment.
Larry Shaeffer

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