Bain & Company analysts forecast that the U.S. auto market will become smaller and more competitive by 2040, citing slowing population growth, changing consumer behavior, and persistently high car prices as key drivers behind the expected decline in sales [1]. The firm projects that automakers could sell over 2 million fewer vehicles by 2040 compared to current levels [1]. Ten years ago, the U.S. saw a record 17.6 million cars, trucks, and SUVs sold, but some forecasts suggest the country may not reach that figure again [1].
Mark Gottfredson, a partner at Bain & Company, emphasized that the auto industry has historically relied on an annual 1% growth rate tied to population increases, but global government statistics now show population growth slowing or declining in some countries [1]. The U.S. fertility rate in 2025 was about 1.6 births per woman, below the replacement rate of 2.1, according to the Centers for Disease Control [1]. While high immigration has offset some of the decline, Bain expects restrictive immigration policies to halve historical net migration rates over the next 15 years, potentially returning to low levels seen in 2019 [1].
Consumer behavior is also shifting, with affordability and alternatives playing a major role. Half of 16-year-olds today lack a driver's license, compared to nearly 70% between 1966 and 1984, though most still obtain licenses by age 25, according to Bain's research [1]. The share of new vehicle registrations among people aged 18 to 34 dropped from 12% in Q1 2021 to under 10% by mid-2025, per S&P Global Mobility [1]. Buyers aged 55 and older now account for nearly half of all new registrations and have held the largest share for eight consecutive quarters [1].
Craig Daitch, founder and president, noted that affordability is a key factor driving these changes [1]. Bain's analysis suggests that automakers will face fierce competition for a shrinking customer base, with technology disruptions further complicating the landscape [1].
CONCLUSION
Analysts expect the U.S. auto market to contract significantly by 2040, driven by demographic shifts, changing consumer habits, and affordability concerns. Automakers will likely face intensified competition for fewer buyers, with older consumers dominating new vehicle registrations. The industry is transitioning from a growth phase to a period of decline, presenting substantial challenges for market participants.