Market Views: Equities
The end of the road: Has the developed world reached 'peak car'?
From boardrooms to showrooms, there is growing confidence in the recovery of the auto industry. However, longer-term data suggest that, cyclical tailwinds aside, the market for automobiles in developed markets could be in structural decline. For the past decade, the developed world has shown signs of hitting ‘peak car’, a plateau or peak in vehicle ownership and usage. Figure 1, below, shows kilometers driven per capita in the US and Europe, which has been in decline since the early 2000s in all countries except Germany. Available data for Japan also suggests driving behavior has plateaued in the last decade, at around 10,000km per capita.