IHS: average age of light vehicles in US rises slightly in 2015 to 11.5 years; length of new vehicle ownership hits record high
The combined average age of all light vehicles on the road in the US has climbed slightly to 11.5 years, based on a snapshot of vehicles in operation (VIO) taken 1 January 2015, according to IHS Automotive. Registrations for light VIO in the US also reached a record level of 257,900,000—an increase of more than 5.3 million (2.1%) since last year and the highest annual increase the auto industry has seen in the US since IHS began tracking VIO growth.
New vehicle registrations also outpaced scrappage by more than 42%—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. 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.—Mark Seng, global aftermarket practice leader at IHS Automotive
Helping age the fleet is the fact that consumers are holding on to their vehicles longer than 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 more than 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.
Based on the growth of new vehicle registrations in the past few years as the US auto industry has rebounded, IHS Automotive analysis found that the volume of vehicles 0-5 years old will increase by 24% over the next five years, while vehicles in the six- to 11-year-old category will decline by 11%. 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% by 2020.
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.