Analyst: Average Age of Cars Still Increasing
June 27, 2019—The average age of cars and light trucks rose to 11.8 years for 2019.
Information analyst IHS Markit also found that the number of vehicles in operation grew by 5.9 million since 2018, which is one of the highest annual increases. The organization estimates 278 million light vehicles on the road today.
The rise in average age got a boost during the recession years. According to IHS Markit, the average age grew by 12.2 percent from 2008 to 2013. It has since come down to a 4-percent increase, which is similar to the pre-recession rate.
“Better technology and overall vehicle quality improvements continue to be key drivers of the rising average vehicle age over time,” said Mark Seng, director, global automotive aftermarket practice at IHS Markit in a press release. “The 40-percent drop in new vehicle sales due to the recession created an acceleration in average age like we’ve never seen before. In the last couple of years, however, average age has returned to its more traditional rate of increase.”
Vehicles are typically older in the western United States, IHS found. Montana has the oldest average light vehicles in the country at 16.6 years. Vermont has the youngest average vehicle at 9.9 years.
IHS also looked at the growth of different generations of vehicles for an idea of how the market might look for aftermarket businesses, including service shops. From the press release:
According to IHS Markit, the shifting dynamic of the age of vehicles in operation indicates the volumes of vehicles in the new to five-year old category will grow 2 percent from 2018-2023, while vehicles in the 6-11 year old range will grow 27 percent. This is a very positive trend for the independent aftermarket as it points to a growing repair “sweet spot” – or growth in the vehicles which drive the most repair opportunities. In contrast, vehicles 12-15 years old will decline 27 percent over the same time period.
“While the decrease in light vehicles 12-15 years of age looks alarming, it relates to the drop in sales due to the recession,” Seng said. “There is simply a lack of 2008 and 2009 model year vehicles due to the lower sales numbers during that timeframe. Even the model years from early in the recovery are lower in number. This disruption simply needs time to work its way through the fleet.”
For the aftermarket repair industry, however, there is also a positive trend with the oldest light vehicles on the road. These older cars and light trucks are growing very fast – with vehicles 16 years and older expected to grow 22 percent from 2018-2023 reaching 84 million units in 2023. In contrast, there were less than 35 million of 16+ year old vehicles on the road in 2002.
The national average vehicle age of 11.8 years brings us back to 2007. The best-selling truck was the Ford F-150, and the best-selling car was the Toyota Camry. It was also the first production year for the Nissan Rogue and Volkswagen Tiguan.
Image: Fiat Chrysler Automobiles