- The Energy Mix - https://www.theenergymix.com -

Working from Home, E-Commerce Produce Permanent 10% Drop in U.S. Traffic Volumes

Changes in work and shopping habits brought on by the coronavirus pandemic will produce a permanent 10% drop in traffic volumes in the United States, reducing vehicle miles travelled (VMT) by 270 billion miles per year and taking 14 million cars off the road, consultants at KPMG International reported this week.

The research “finds the cocoon culture COVID-19 has created is not going away—even if a vaccine is made widely available—and that will have potentially dire consequences for the auto industry,” Bloomberg reports.

With Americans sheltering at home in April, VMT fell by an unprecedented 64%, and “those new habits will die hard,” the news agency writes, with about a million fewer cars and trucks selling each year and vehicle ownership falling to just under two per household.

“People buy a car to get to and from work and because shopping is a very important part of their lives,” said Gary Silberg, head of KPMG’s global automotive practice. “If two of the primary missions that the American public buys a car for are going to reduce in demand, we know that’s going to have an adverse impact on auto sales. It’s just like gravity.”

This year, the U.S. National Automobile Dealers Association expects auto sales to fall as low as 13 million, from 17 million in 2019.

“With fewer miles driven and fewer cars on the road, that also means dealers and mechanics will have less money coming in from repairs and other after-market services aimed at keeping cars running,” Bloomberg says. But “the upside of these changes is that the market for delivery vehicles is booming thanks to the surge in online shopping.”

The story lists Ford, Volkswagen, and start-up Rivian Automotive as companies that are moving quickly to produce self-driving or electric delivery vehicles.

“This is terrible news for the after-market, where a lot of profits are being made,” Silberg told Bloomberg. “Fewer cars driving fewer miles means less wear and tear. This will lead to profound changes.”

But “the silver lining is that with all these people pushing the buttons [on e-commerce sales], it’s Christmas every day,” he added. “All the packages we’re getting are massively increasing demand for commercial vehicles.”