Aftermarket opportunities abound as sweet spot continues to
grow
SOUTHFIELD, Mich., May 22, 2024
/PRNewswire/ -- Vehicles on the road are getting even older,
according to S&P Global Mobility. The average age of cars and
light trucks in the U.S. has risen again to a new record of
12.6 years in 2024, up by two months over 2023, according to new
analysis. Increase in average age is showing signs of slowing as
new registrations normalize.
Average age of cars and light trucks in the
U.S. has risen again to a new record of 12.6 years in 2024
This continues to improve business opportunities for
companies in the aftermarket and vehicle service sector in the
U.S., as repair opportunities are expected to grow alongside
vehicle age.
"With average age growth, more vehicles are entering the prime
range for aftermarket service, typically from 6 to 14 years of
age," said Todd Campau, aftermarket
practice lead at S&P Global Mobility. "With more than 110
million vehicles in that sweet spot -- reflecting nearly 38 percent
of the fleet on the road -- we expect continued growth in the
volume of vehicles in that age range to rise to an estimated 40
percent through 2028."
Two passenger cars scrapped for every new passenger car
registration
Vehicle scrappage rates – the measure of vehicles exiting the
active population – continue to hold steady. As of January 2024, the scrappage rate was 4.6%,
largely unchanged from 4.5% in January
2023.
Looking at the mix of the fleet, since 2020, more than 27
million passenger cars exited the US vehicle population, while just
over 13 million new passenger cars were registered. At the same
time, over 26 million light trucks (including utilities) were
scrapped and nearly 45 million were registered.
"Consumers have continued to demonstrate a preference for
utility vehicles and manufacturers have adjusted their portfolio
accordingly, which continues to reshape the composition of the
fleet of vehicles in operation in the market," said Campau.
VIO grows to 286M, while EV VIO
exceeds 3M
The US vehicle fleet surged to 286 million vehicles in operation
(VIO) in January, up 2 million over 2023, but the distribution of
vehicles by age is changing. Vehicles under the age of six
accounted for 98M vehicles in 2019,
or about 35 percent of VIO. Today they represent less than
90M vehicles and are not expected to
reach that threshold again until 2028 when they will represent
about 30% of VIO, according to S&P Global Mobility estimates.
This is driven by the impact of COVID and subsequent supply chain
shortages that disrupted vehicle supply and registrations – and
following historically high volumes in 2015-2019.
As a result, the primary driver of VIO growth will be vehicles
in the aftermarket 'sweet spot' -- vehicles 6-14 years of age, and
even older vehicles, that are expected to represent about 70% or
more of VIO for the next five years, which will serve as a tailwind
to aftermarket service opportunities.
EVs on the road also continued to increase, with 3.2 million EVs
in operation in January. 2023 EV registrations surpassed one
million units for the first time and increased about 52% compared
with 2022. The rate of EV growth was slower than some automakers
had anticipated, and there is potential for the average age of EVs
to rise in the short term as consumer adoption slows. The average
age of EVs in the U.S.is 3.5 years and has been holding largely
steady since 2019 with new registrations representing a large share
of overall EV VIO.
"We started to see headwinds in EV sales growth in late 2023,
and though there will be some challenges on the road to EV adoption
that could drive EV average age up, we still expect significant
growth in share of electric vehicles in operation over the next
decade," said Campau.
About S&P Global Mobility
At S&P Global Mobility, we provide invaluable insights
derived from unmatched automotive data, enabling our customers to
anticipate change and make decisions with conviction. Our expertise
helps them to optimize their businesses, reach the right consumers,
and shape the future of mobility. We open the door to automotive
innovation, revealing the buying patterns of today and helping
customers plan for the emerging technologies of tomorrow.
S&P Global Mobility is a division of S&P Global (NYSE:
SPGI). S&P Global is the world's foremost provider of credit
ratings, benchmarks, analytics and workflow solutions in the global
capital, commodity, and automotive markets. With every one of our
offerings, we help many of the world's leading organizations
navigate the economic landscape so they can plan for tomorrow,
today. For more information, visit www.spglobal.com/mobility.
Media Contact:
Michelle Culver
S&P Global Mobility
248.728.7496 or 248.342.6211
Michelle.culver@spglobal.com
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SOURCE S&P Global Mobility