Aging American vehicle fleet

A new report out of the US has officially placed the average age of the American vehicle at 10.8 years — now significantly older than the average age of the vehicle fleet in Australia.

According to industry statisticians RL Polk & Co, passenger cars are now above 11 years in age (11.1), as of July last year, and combined with the age of commercial vehicles (10.4 years), the average is 10.8 years — up from 10.6 in July 2010.

Polk's global aftermarket practice leader, Mark Seng, quoted in US online publication Auto Remarketing, has drawn the conclusion that the aging vehicle fleet is good news for aftermarket goods and service providers.

“The increasing age of the vehicle fleet, together with the increasing length of ownership, offers significant business growth opportunity for the automotive aftermarket. Dealer service departments and independent repair facilities, as well as aftermarket parts suppliers, will see increased business opportunity with customers in need of vehicle service.”

But Seng wears an aftermarket industry 'hat'. It's not great news for new-car retailers in the US. The aging vehicle fleet is a symptom of declining sales of new cars and trucks in America since the arrival of the GFC in 2008. According to Polk, the American vehicle fleet was just 9.7 years old as recently as 2006.

In contrast, the age of the Australian vehicle fleet has dropped from a high of around 11 years in the mid 1990s to 10 years in the latest Motor Vehicle Census, according to the Australian Bureau of Statistics (see chart). The younger vehicle parc in Australia seems to be a consequence of more new cars on the roads with each passing year. Even with the GFC, which barely touched the Australian economy, the total sales of new cars has trended upwards over the past several years, with only one year (2009) when the market failed to reach a million plus cars.

One reason new-car sales seem to be at least holding steady in Australia (during years without Japanese disasters or global financial crises) is that curse of the local manufacturer —a strong currency value. With the Aussie dollar now worth more than one US dollar, imports are relatively affordable and younger buyers are more likely to opt for a small, new car than a used car. With used-car buyers drying up, the marketability of older cars is fading away and even though modern cars are much more durable and require less servicing of the traditional kind, they're not being kept on the roads as long.

According to the Auto Remarketing article, Polk anticipates new-car sales growth in the US, during 2012, which should reverse the aging trend of the American parc.

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