Ten years ago, a record 17.6 million cars, trucks and SUVs were sold in the United States. Now analysts at consulting firm Bain & Company warn the American auto market may never approach that figure again as a convergence of demographic shifts, behavioral changes and economic pressures points to sales more than 2 million units below current levels by 2040.

Market Context

The broader automotive sector has been navigating a challenging environment in recent years. After pandemic-era supply chain disruptions constrained new vehicle availability, the industry faced a subsequent demand pull-forward that left many shoppers priced out of an increasingly expensive market. AutoForecast Solutions projects U.S. new car sales will remain relatively flat at around 16 million units through 2033, marking a notable departure from historical growth trajectories.

Analysis

The forces converging on the auto industry represent more than cyclical headwinds, according to Mark Gottfredson, a partner at Bain & Company. The sector has historically relied upon approximately 1% annual growth tracking population increases, but government statistics worldwide indicate population growth has slowed with some countries already experiencing declines. "It is the perfect storm, isn't it," Gottfredson said in remarks to CNBC. "It starts with the population declines. You're no longer a growth industry. You're a declining industry. You're a declining industry at a time when the technology is disrupting everything."

The demographic pressures are particularly acute. The U.S. fertility rate reached approximately 1.6 births per woman in 2025, below the replacement rate of 2.1 according to the Centers for Disease Control. While elevated immigration has partially offset this trend—with roughly one million people entering the country annually on historical average—Bain expects restrictive immigration policies to persist over the next 15 years, cutting net migration rates by half and returning levels to those not seen since 2019.

Simultaneously, consumer behavior is shifting in ways that could suppress demand. Half of 16-year-olds today do not hold a driver's license compared with nearly 70% during the peak cohort period between 1966 and 1984, according to Bain research. While this may reflect delays rather than permanent avoidance—most individuals still obtain licenses by age 25—the implications for long-term vehicle demand are significant.

The age demographics of vehicle purchasers underscore these shifts. Buyers aged 55 and older now account for nearly half of all new registrations and have held the largest share for eight consecutive quarters, according to S&P Global Mobility data. Meanwhile, the share of new vehicle registrations among people aged 18 to 34 fell from 12% in the first quarter of 2021 to under 10% by mid-2025.

Affordability remains a critical barrier. Craig Daitch, founder and president of Telemetry, noted that new vehicle monthly payments have increased 30% over four years with nearly one in five new vehicles now carrying payments exceeding $1,000 per month. "The engine behind it is affordability," Daitch said.

Key Numbers

- Record U.S. auto sales reached 17.6 million units approximately ten years ago

- Bain projects market shrinkage of more than 2 million units by 2040

- U.S. fertility rate was approximately 1.6 births per woman in 2025, below the replacement rate of 2.1

- Net migration rates expected to fall by half due to anticipated restrictive immigration policies over next 15 years

- Half of 16-year-olds today lack a driver's license compared with nearly 70% between 1966 and 1984

- New vehicle registrations among ages 18-34 fell from 12% in Q1 2021 to under 10% by mid-2025 per S&P Global Mobility

- Buyers aged 55 and older represent nearly half of all new registrations, holding largest share for eight straight quarters

- Monthly payments on new vehicles increased 30% over four years; nearly one in five carries payment exceeding $1,000 per month

- Vehicle longevity reached record 12.8 years on the road in 2025 according to S&P Global Mobility

What to Watch

AutoForecast Solutions expects sales around 16 million units annually through 2033, the furthest year it provides estimates for, suggesting limited near-term relief from current pressures. Should robotaxis become widely available and affordable within 15 years, Bain research indicates the share of licensed drivers could decline by 2 to 3 percentage points to approximately 85%, with vehicles per driver potentially dropping from 1.2 to 1.1—equivalent to 10% to 20% of U.S. households shedding one vehicle.

Gottfredson revised earlier projections that had targeted 2030 as the year volumes would dip below 14 million, citing delays in autonomous vehicle deployment. However, he emphasized that population-driven declines are already predetermined by birth rates. "We already know how many people have been born and how many people will be of vehicle driving age at age 16 in 16 years from now," he said. "And so we can say with quite a bit of certainty that when we get to 2040, we're going to see some decline in the U.S."

The deregistration rate—when vehicles are taken off U.S. roads and either scrapped or exported—provides an early warning signal. That rate was approximately 6% in 2000, fell to about 5% as of 2025, and could decline further to 4.4% by 2040 according to Bain projections, primarily because vehicles are lasting longer on the road.