The average age of light vehicles on U.S. roads keeps rising, reaching a record high of 10.8 years in 2011, according to an analysis released recently by automotive research firm Polk. Passenger cars showed a modest increase in age since 2010, from 11 years to just 11.1 years at the end of June 2011. Light trucks (including pickups and SUVs) show a more sizeable gain in the same timeframe, from 10.1 years to 10.4 years. Overall, average vehicle age has been increasing quickly over the past five years. Polk reports average age based on an analysis of national vehicle registration data.
SALES DECLINES IN 2008–2009 CONTINUE TO IMPACT AGE OF FLEET
The slowdown of the aging of passenger cars directly correlates to the low sales volumes and the mix of car and truck sales in the U.S. market in 2008 and 2009, a time in which more trucks than cars were registered. While more trucks were sold over the same timeframe, they showed a faster aging rate. Polk expects this trend may change in the coming years as CUV and small SUV populations in the U.S. market have risen in 2010 and 2011 due to their continued success in the market. Additionally, the rebound in new vehicle sales in 2011 and for the next couple of years will most likely slow down the aging rate seen in the market over the past three years, according to Polk.
"The increasing age of the vehicle fleet, together with the increasing length of ownership, offers significant business growth opportunity for the automotive aftermarket," said Mark Seng, global aftermarket practice leader at Polk. "Dealer service departments and independent repair facilities, as well as aftermarket parts suppliers, will see increased business opportunity with customers in need of vehicle service."
SERVICE AND PARTS
For service and parts providers, the increasing age of the vehicle fleet, as well as the increasing length of vehicle ownership, could mean more business. The average length of ownership of new and used vehicles is just more than 53 months, an 18-month increase since 2001, Polk found.
“That provides more opportunities for repair in the aftermarket,” Seng said. “But it’s also a good thing for the manufacturing folks doing service or selling parts.”
NEW CAR SALES
However, Paul Taylor, chief economist for the National Automobile Dealers Association (NADA), believes business for the aftermarket industry will decline as new-vehicle sales rise and aging vehicles on the road are replaced. NADA expects fierce competition for new-vehicle sales as companies such as Toyota, Honda and Subaru — which suffered supply-chain disruptions because of the earthquake and tsunami in Japan and flooding in Thailand last year — get back in the market this year.
“It’s going to be a very active market this year and I think we’ll start to see a reversal of this lengthening average age,” Taylor said.
Taylor predicts that new car sales in 2012 will exceed 13.9 million because of the number of aging vehicles on the road. And some other analysts project U.S. sales topping 14 million units this year. In 2011, U.S. light-vehicle sales totaled 12.8 million units, a 10 percent rise over 2010. Taylor cited aging vehicles, affordable credit and aggressive incentives as the key factors for the increase.[Source: Research conducted by Polk. 17 Jan. 2012. Web. 17 Jan. 2012; Taylor, Paul, chief economist for the National Automobile Dealers Association (NADA). 17 Jan. 2012. Web. 17 Jan. 2012.]