Average age of U.S. light vehicles reaches record high, Polk says
A rebound in new vehicle sales in 2011 and over the next couple of years is expected to slow the rate at which the nation's car and light truck fleet is aging.
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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 today by automotive research firm Polk.
Experts say that could be good news for new-vehicle dealers and the service and parts sector.
Polk’s analysis of national vehicle registration data shows the average age of light vehicles has steadily increased since 1995, though more rapidly in the past five years.
The average age of cars rose slightly from 11 years in 2010 to 11.1 years in 2011. Light trucks increased from an average of 10.1 years old in 2010 to 10.4 years old in 2011.
For new-vehicle dealers, the message seems clear: It’s high time to sell new vehicles to customers who have been making do with their vehicles until the economy turns around.
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, says Mark Seng, global aftermarket practice leader for Polk.
“The big difference over the last four or five years is the acceleration of [average U.S. vehicle age] due to low light-vehicle sales and people holding onto their cars longer,” he said. “Traditionally most of the older vehicle repairs go to the independent aftermarket but it’s an opportunity for manufacturers as well.”
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.”
But Paul Taylor, chief economist for the National Automobile Dealers Association, said he believes business for the aftermarket industry will decline as new-vehicle sales rise and aging vehicles on the road are replaced.
Taylor agrees with Polk that a rebound of new-vehicle sales in 2011 and over the next couple of years will slow the rate of aging as well.
Taylor said 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 predicted this month that new car sales in 2012 would 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.