Ford Motor Company (F), General Motors Company (GM), Toyota Motor Corporation (ADR) (TM): When Americans Stopped Driving

Rather than cutting back on miles driven, we have adapted to higher gas prices mostly through better fuel economy, which spiked around 2005 after plateauing for two decades.

Another explanation is a shift in where Americans live. Following decades of booming outward population growth from cities into suburbs, the past decade saw the return of urban living. As Reuters reports: “In 2010, a total of 80.7 percent of Americans lived in urban areas, up from 79 percent in 2000. Conversely, 19.3 percent of the U.S. population lived in rural areas in 2010, down from 21 percent in 2000.”

Rural areas are more conducive to long drives, so the shift explains part of the decline in vehicle miles traveled.

Lastly, one of the more convincing factors fueling the decline in driving is demographics. This chart, from the Federal Highway Administration, shows how driving differs among age groups:

These rates are important because of an underappreciated demographic shift going on in the U.S. As the birth rate fell following the baby boom of the 1950s and 1960s, the population of Americans in their 30s and 40s began declining early last decade. Census data shows there are actually four million fewer “highly mobile” Americans age 34-43 today than there were in 2005, when miles driven per capita peaked. The population of Americans age 74 and up, who drive the least, grew by two million during that period.

All of these shifts create opportunities for Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), and Toyota Motor Corporation (ADR) (NYSE:TM), which have revamped their fleets to adapt to the new American driver. A decade ago, the manufacturer who could deliver the most headroom and horsepower per dollar won. Going forward, the fruits will go to whoever can deliver the most gas mileage and dependability per dollar. It is a new paradigm, for both drivers and car companies.

The article When Americans Stopped Driving originally appeared on Fool.com and is written by Morgan Housel.

Morgan Housel has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

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