New Report Says Car Market Will Have to Shrink Significantly by 2040

Tech News New Report Says Car Market Will Have to Shrink Significantly by 2040 It's almost as bleak out there for car companies as it is for car buyers. 28, 2026, pm ET Reading time 3 minutes A Buick/GMC dealership in southern California © Photo by Jay L Clendenin/ Read Later Read Later Comments (23) A new piece of analysis by Bain & Company, as reported by CNBC, paints a picture of a US car market contracting between now and 2024 as market forces make the auto biz uncomfortably competitive. Bain cites declining fertility as a cause, along with decreased immigration—in other words fewer people to buy cars to begin with. The auto industry matured, the report says, amid the expectation of 1% population growth per year, and population growth is now just about flat. But Bain says there’s also the issue of changing “behavior” among transportation consumers. Oh, and Bain also acknowledges that cars are just too damn expensive for many people now. A different forecasting firm called AutoForecast Solutions told CNBC it expects flat sales for about the next seven years, and told that publication, “When you look into the future, younger people are more likely to use Uber or Lyft when they’re going somewhere.” If this is meant to be a projection about the future, it might be a fanciful assumption in its own right, since inflation keeps hitting ride-hailing apps, and riders seem to be cutting back to save money. Nonetheless, Bain points out that today, only half of 16-year-olds have their driver’s license, as opposed to 70% from 1966 through 1984. Though Bain also says “most people” get around to getting their license ’re 25. A report last month in the Wall Street Journal combined projections from Ford, GM, Toyota, and other automakers, and concluded that a tranche of about a million new car buyers has disappeared from the U. S. economy, probably never to return. It’s been widely reported that new cars in general are just shockingly expensive now. There are literally no sub-$20,000 new cars in America, and the average cost of a new car is around $50,000. Consequently, according to Bain, monthly payments for new vehicles have climbed 30% over four years. Somehow, one fifth of new vehicle monthly payments is more than $1,000. Millions of people are paying that, if you can believe it. And you might have noticed that cars on the road are simply older. The report says in the year 2000, the annual rate at which cars underwent “deregistration” or were removed from the roads—junked, mostly—was 6%.