Vehicle Ownership and Income Growth, Worldwide: 1960-2030

TLDR

Vehicle ownership expansion in emerging markets is accelerating, raising transport, environmental, and oil‑market concerns, yet scholars disagree whether these rates will ever match those of advanced economies. The study develops a model that links vehicle saturation to observable country characteristics such as urbanization and population density. The model is estimated using pooled time‑series data from 1960 to 2002 and cross‑sectional data for 45 countries representing 75 % of the global population. Projections show vehicle stock rising from 800 million in 2002 to over 2 billion by 2030, with 56 % of vehicles in non‑OECD countries (up from 24 %) and China’s stock nearly doubling to 390 million, implying rapid oil‑demand growth.

Abstract

The speed of vehicle ownership expansion in emerging market and developing countries has important implications for transport and environmental policies, as well as the global oil market. The literature remains divided on the issue of whether the vehicle ownership rates will ever catch up to the levels common in the advanced economies. This paper contributes to the debate by building a model that explicitly models the vehicle saturation level as a function of observable country characteristics: urbanization and population density. Our model is estimated on the basis of pooled time-series (1960-2002) and crosssection data for 45 countries that include 75 percent of the world’s population. We project that the total vehicle stock will increase from about 800 million in 2002 to more than two billion units in 2030. By this time, 56% of the world’s vehicles will be owned by non-OECD countries, compared with 24% in 2002. In particular, China’s vehicle stock will increase nearly twenty-fold, to 390 million in 2030. This fast speed of vehicle ownership expansion implies rapid growth in oil demand.