May 29, 2023

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Good news: More vehicles getting older

Good news: More vehicles getting older

At the commence of 2022, the VIO was 283 million models, compared with 279 million at the commence of 2021, Campau mentioned.

Meanwhile, new-vehicle sales for 2022 are forecast to reach about 14 million units, down from 15.1 million in 2021.

So how is the VIO expanding? Persons are driving their vehicles longer, rather of scrapping them, he spelled out.

The scrappage price, or the range of autos taken out of use and not registered, dropped to 4.2% at the beginning of 2022 and has been trending downward through the calendar year.

“That 4.2% scrappage that started this yr is a person of the most affordable we have experienced in the previous 20 several years,” he mentioned, including, “That implies that persons are not taking cars off the road. … We have witnessed the best residual worth for used motor vehicles that we’ve found in a quite prolonged time. There is certainly need for cars and individuals cannot get a new car or truck, they are buying a new-to-them auto on the utilised car ton. And which is pushed the price tag of utilized motor vehicles higher. …

“We are observing much more autos becoming repaired, staying marketed and remaining in the fleet for a more time time.”

This craze is also triggering a continual enhance in the common age of motor vehicles on the street.

“At the commence of the calendar year we were at 12.2 yrs regular car or truck age. We have been heading historic high just after historical higher for a amount of yrs. This is a historical superior,” he reported.

“And I can explain to you what we are viewing now is we hope this amount is likely to go higher. … We’re seeing lessen new auto revenue and we’re seeing the car fleet increase. Along with that fleet progress is automobiles staying on the street more time. We are not introducing more to the combine.”

These trends are “quite very good news” for the aftermarket, Campau claimed, considering the fact that individuals with older motor vehicles are eager to maintain repairing and replacing components to keep all those vehicles working.

“The other excellent news for the aftermarket is that people today are driving,” he explained, noting that in 2021, the selection of car miles traveled (VMT) returned to pre-pandemic levels to about 3.4 trillion miles a year.

“We be expecting that selection is likely up this calendar year. It truly is incredibly moderate expansion to 12,500 miles (normal per auto) for a overall of 3.5 trillion miles traveled in the U.S. in 2022.”

S&P International expected significant gasoline costs before this calendar year to stifle driving patterns, but that hasn’t been the scenario.

“The driving general public would seem to be, not delighted about it, but they however appear to be getting out and driving and absorbing that increase in fuel rates,” Campau stated, noting that the VMT may differ by location.

Campau pointed to 5 trends affecting the automotive aftermarket this 12 months and heading forward: