Who needs two cars?

American Demographics, Dec, 1996 by Brad Edmondson, Fanglan Du

Almost every American with a driver's license has a car, and only a few households can afford to buy new cars. Expect a bright future for auto parts, used cars, and traffic jams.

Cars are getting personal: almost every American with a driver's license has one. This explains the afternoon gridlock et high schools in (1) Fairfax County,VA, where 71 percent of the 338,400 households have multiple cars. "It isn't rich kids getting a BMW for their 16th birthday," says Kenneth Orski, a transportation consultant and Fairfax parent."When both parents work full-time, there isn't anyone to drive the kid to band practice."

Sixty percent of U.S. households have two or more cars, according to 1996 estimates by Urban Decision Systems. In 1960, just 20 percent had two cars. In 1990, almost 16 percent of households had three or more cars; in 1960, fewer than 3 percent did. Counties with the highest proportion of multi-car households (shown in red) also tend to have a high proportion of two-earner households. In the Minneapolis suburbs of (2) Scott County, MN, 77 percent of 22,900 households have two cars and 70 percent of women are in the labor force. Nationally, the share Of working women is 59 percent.

Automobile sales boomed in the 1970s and 1980s as women bought new cars to go with new jobs and new households. The 1990s are different The share of women who are in the labor force has reached a plateau, households are forming at a slower pace, cars last longer than they once did, and new cars cost a lot more. The result is a flat market for new cars in the U.S. and strong demand for used cars and auto parts.

About 15 million new cars were sold in the U.S. last year."Probably 10 million of them are sold to the top 30 percent of households," says Paul Ballew, chief economist for J.D. Power & Associates. This creates intense competition in affluent babyboomer havens like (3) Douglas County, CO, where 83 percent of the 30,700 households have two cars and the median household income is nearly $60,000. "Both cars in households like these tend to be fairly new and of comparable quality,"says Ballew. The hottest wheels in the burbs are no longer minivans, but small "entry-level luxury" sedans for drivers in empty-nest households. A new competitor in this field is the Cadillac Catera, described by its manufacturer as "sporty, safe, luxurious, and long-lasting"

While the affluent may care about image, most Americans are concerned about keeping their vehicles roadworthy. The median age of cars in the U.S. is 7.7 years, the oldest level recorded in over 40 years by The Polk Company's annual vehicle census. "The price of anew car is so high that it makes more sense to, keep an old one," says Rich Seleno of Polk."Auto-parts stores are taking a greater interest in the do-it-yourself market" The strongest markets for backyard mechanics are small cities with lots of skilled crafts workers,like (4) Fairbanks,kK. But the greater opportunity maybe in selling auto-repair skills to women. "The industry has not reached out to them," says Seleno.

Most of the growth in two-car households is in slow-growing counties with below-average rates of vehicle ownership. In (5) Buffalo (Erie County, NY), the proportion with two cars will increase from 46 percent of 371,800 households in 1996 to 48 percent of 362,500 households in 2001, according to Urban Decision Systems. But in rapidly growing (6) Riverside County, CA, the share is projected to decline from 62 percent of 455,500 households in 1996 to 61 percent of 529,600 households in 2001. Many new arrivals are immigrants who can't afford two sets of wheels. Others don't want to add another car to Los Angeles's overstuffed roads.

California is trying hard to solve the pollution and congestion problems caused by the solo-driver lifestyle. An agreement between major manufacturers and the state's Air Resources Board says that about 10 percent of a manufacturer's vehicle sales in California must run on electricity or natural gas by 2003. Last April, Toyota unveiled the RAV4-EV, a sport-utility vehicle with a top speed of 79 miles an hour and a range of 125 miles between charge-ups."The potential market for electric vehicles is significant," says Toyota vice president George Borst, for two reasons: Americans demand clean air, but they love their cars.