The Shrinking American Car Fleet

New York Times (Rudolf) - The auto fleet in the United States shrank by an estimated 2 percent in 2009, as 14 million cars were scrapped and only 10 million new cars were sold, according to a new report by the Earth Policy Institute, an environmental research organization in Washington.

The decline – the first seen since World War II – was driven in large part by the recession, which sharply curbed new car sales. But broader social and economic forces were also at work, including the saturation of the American market and a declining interest in cars by the latest generation of young Americans, Mr. Brown argued. These forces will likely continue to drive down the size of the American auto fleet through the coming decade, even in the event of a strong economic recovery, he said. If current trends persist, the number of cars in the United States – now around 250 million – could fall by 10 percent by 2020.

IndustryWeek (Alpern) - According to KPMG's 2010 Global Auto Executive Survey, which queried 200 senior leaders at automakers and suppliers from around the world, 88% of respondents said overcapacity is still a problem despite numerous closures and tens of thousands of layoffs in recent years.

Research firm Wards Automotive has estimated that recent plant closings made by the respective reorganizations of General Motors and Chrysler, along with additional closings by Ford and Toyota, reduced North American capacity by about 1.5 million vehicles in 2009, down to 18 million units. But even those cuts might not be enough.

The survey also suggests that consolidation is likely to occur within the global automotive industry. Nearly three-quarters of executives polled believe Chinese and India-based OEMs are going to be among the big winners in the market over the next five years, followed by Korean (Kia and Hyundai), Japanese (Toyota and Honda), and German automakers.

[Updated - Some Signs of Brightness]
Associated Press (Krisher) - General Motors may reopen some shuttered factories because it can't produce four of its vehicles fast enough to meet demand, and Chrysler is set to hire more engineers and product development workers.

While both companies still depend on government help, the moves are signs of increased confidence that the U.S. auto market bottomed out last year and will improve in 2010, even without a jolt from a Cash for Clunkers-style program.