Editorial: Demographic ‘time bomb’ awaits automakers

Our analysis shows that by 2025, demographic trends, absent other changes, will reduce U.S. vehicle demand more than 20 percent to about 11.5 million — the same level as in the 2008-09 recession. A decline in immigration rates could push down structural demand to about 10 million vehicles by 2025.

Add in the risk of recession, which is likely in the next 12 to 18 months, and the scenario becomes a perfect storm for the U.S. auto industry. In six to eight years — one product cycle away — a shift to EVs, autonomous cars and mobility services could leave automakers saddled with plants and other vital assets unable to earn expected returns, a shock that many may not survive.

The double punch of a recession and shifting demographics on the eve of that transition could cripple automakers before new technologies even take off.