Average Age of Light Vehicles in the U.S. Rises Slightly in 2015 to 11.5 years, IHS Reports
July 29 2015 - 7:00AM
Business Wire
U.S. Light Vehicles in Operation (VIO) Hits Record Levels at
Nearly 258 Million; Length of New Vehicle Ownership Also Hits
Record High at 77.8 Months
The combined average age of all light vehicles on the road in
the U.S. has climbed slightly to 11.5 years, based on a snapshot of
vehicles in operation (VIO) taken Jan. 1 of this year, according to
IHS Automotive, a global provider of critical information and
insight to the automotive industry and part of IHS Inc. (NYSE:
IHS).
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Registrations for light VIO in the U.S. also reached a record
level of 257,900,000. That’s an increase of more than 5.3 million
(2.1 percent) since last year and the highest annual increase the
auto industry has seen in the U.S. since IHS began tracking VIO
growth. New vehicle registrations also outpaced scrappage by more
than 42 percent – the highest rate seen since the statistic has
been tracked, according to the analysis. Scrappage is defined by a
vehicle being taken out of the fleet and no longer in use.
Average age for both passenger cars and light trucks increased
just slightly in 2015, and both now stand at 11.5 years.
“As long as we have tracked average age, it has gradually risen
over time due to the increasing quality of automobiles,” said Mark
Seng, global aftermarket practice leader at IHS Automotive. “For
the five to six years following the recession, however, average age
increased about five times its traditional rate, which we attribute
to the nearly 40 percent drop in new vehicle sales in 2008-2009.
We’re now seeing average age begin to plateau and return to its
traditional rate of increase as consumers have recovered from the
great recession and have begun buying new vehicles again.”
Helping age the fleet is the fact that consumers are holding on
to their vehicles longer than ever before. As of Q1 2015, the
average length of ownership for a new vehicle is 77.8 months,
according to IHS analysis, an increase of nearly 26 months since Q1
2006. For used vehicles, it is 63 months, an increase of just over
25 months (since Q1 2006).
Looking ahead, IHS forecasts that average age is likely to hit
11.6 years in 2016 but not reach 11.7 until 2018. The rate of
growth is slowing as compared to 2008-2013 due to the recovery in
new vehicle sales. IHS Automotive has expected this and has been
preparing customers and industry leaders in the aftermarket to
respond to this slowdown in growth.
The number of vehicles scrapped in 2014 declined slightly from
2013, with just over 11 million light vehicles scrapped during the
12-month timeframe analyzed by IHS Automotive, or 4.4 percent of
the fleet. In comparison, a record high of more than 14 million
vehicles were scrapped in 2012.
Dynamics of Fleet Age and Mix on Aftermarket Repair
Opportunities
The drop and recovery of new vehicle sales since the U.S.
economic recession has also had a significant impact on the various
age segments of the overall fleet, which is important to business
planners in the aftermarket and service industries as they manage
inventories of parts required and plan for sales and service
activity accordingly.
Based on the growth of new vehicle registrations in the past few
years as the U.S. auto industry has rebounded, IHS Automotive
analysis found that the volume of vehicles 0-5 years old will
increase by 24 percent over the next five years, while vehicles in
the six- to 11-year-old category will decline by 11 percent.
Because of improved quality and consumers holding their cars and
light trucks longer, vehicles 12-plus years old continue to grow
and will increase 15 percent by 2020.
“While the decline in volumes of vehicles six to 11 years old
appears to indicate that the aftermarket “sweet spot” – those model
years driving the majority of aftermarket repair opportunities – is
shrinking,” Seng said. “I believe we need to begin thinking about
that ‘sweet spot’ differently. Now that the average age is 11.5
years, the key repair opportunities must include vehicles older
than 11 years, which hasn’t been considered by many in the
marketplace up to now.”
When looking at six- to 11-year-old vehicles in 2015, the group
includes just over 81 million cars and light trucks. However, if
you extend that range to include up to 13-year-old vehicles, the
number is nearly 108 million and gets to nearly 120 million for six
to 14 years old.
The IHS Automotive aftermarket team is working with customers in
all areas of the aftermarket to help them best identify
opportunities and specific planning efforts that may help improve
their business as they adjust to this change in the market.
Likewise, business planning opportunities also are under way at the
OEMs to help them identify additional sales opportunities as
vehicles are taken out of service and newer vehicles are coming
into the U.S. vehicle fleet.
About IHS Automotive
(www.ihs.com/automotive)
IHS Automotive, part of IHS Inc. (NYSE: IHS), offers clients the
most comprehensive content and deepest expertise and insight on the
automotive industry available anywhere in the world today. With the
2013 addition of Polk, IHS Automotive now provides expertise and
predictive insight across the entire automotive value chain from
product inception—across design and production—to the sales and
marketing efforts used to maximize potential in the marketplace. No
other source provides a more complete picture of the global
automotive industry. IHS is the leading source of information,
insight and analytics in critical areas that shape today’s business
landscape. IHS has been in business since 1959 and became a
publicly traded company on the New York Stock Exchange in 2005.
Headquartered in Englewood, Colorado, USA, IHS is committed to
sustainable, profitable growth and employs about 8,800 people in 32
countries around the world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2015
IHS Inc. All rights reserved.
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IHS AutomotiveMichelle Culver, +1 248 728
7496michelle.culver@ihs.comorIHS Media Relations, +1 303 305
8021press@ihs.com
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