Lang Aftermarket iReport: 14 million autos dodge scrappage

“An estimated 14 million cars and light trucks were not scrapped in the U.S. between 2014 and 2019, resulting in annual vehicle scrappage rates during these six years that were nearly one-fifth lower, on average, than they had been over the previous six years.”

“This significant reduction in vehicle scrappage has important consequences for the number of light vehicles on the road, the share of domestic and foreign nameplates, as well as the population surge of older cars and light trucks.”

— Jim Lang, publisher, Lang Aftermarket iReport

Lower Vehicle Scrappage Rates

The rate of vehicle scrappage (the removal of vehicles from operation) in the U.S. has historically been boosted by strong new car and light truck sales and/or growth in the number of older vehicles.

Both of these conditions occurred in dramatic fashion during 2014 through 2019. However, annual vehicle scrappage rates declined during this period (rather than increased) compared to the annual scrappage pace over the previous six years.

Vehicles in Operation (VIO)

The significant decline in annual vehicle scrappage during 2014 through 2019 resulted in a VIO increase of more than 14 million cars and light trucks, vehicles that would have been scrapped had the scrappage rates recorded during 2008 through 2013 continued unabated.

These 14 million cars and light trucks not scrapped accounted for over 45% of the total VIO gain of approximately 30 million cars and light trucks from the beginning of 2014 through the end of 2019.

Domestic Nameplate Population

Since domestic nameplates account for a large share of vehicle scrappage in the U.S., the number of domestic nameplates in operation was boosted by nearly 10 million during this time by the falling scrappage pace.

This slowed the growth of foreign nameplates as a percentage of all cars and light trucks on the road despite their record new vehicle sales during these six years.

Older Vehicle Age Groups

Older cars and light trucks have historically accounted for the largest share of vehicles scrapped. Consequently, the below average scrappage rates over the past six years have been a major force driving the unprecedented population surge of vehicles 12 years and older on U.S. roads.

Aftermarket Consequences

More vehicles in operation, the changing mix of foreign and domestic nameplates, as well as the rapid population expansion of older vehicle age groups are all the consequences of lower scrappage.

Both the increasing vehicle count and the growth of older cars and light trucks are positive for aftermarket volume, particularly when annual mileage is increasing (as it did during 2014 through 2019).

The impact of below-average scrappage on the mix of foreign and domestic nameplates also has had consequences for the aftermarket, particularly in terms of where automotive products are sold, where vehicle service is performed, as well as the brands of products that are used in the repair and maintenance of vehicles.

Six Major Takeaways

• Annual vehicle scrappage rates in the U.S. during 2014 through 2019 averaged more than one-fifth lower than the pace of scrappage over the previous six years.
• Approximately 14 million cars and light trucks were not scrapped in the U.S. during the past six years (2014 through 2019), reducing vehicle scrappage rates.
• Despite an increase in new vehicle sales and the growth of older cars and light trucks in operation, scrappage in the U.S. did not increase over the past six years, as it has historically done under these circumstances.
• The 14 million vehicles not scrapped accounted for approximately 45% of the total gain of vehicles in operation (VIO) during 2014 through 2019.
• The decline in scrappage during 2014 through 2019 slowed the share growth of foreign nameplates on U.S. roads during this six-year span, as more domestic nameplates survived.
• Since older cars and light trucks generally account for a large share of vehicles scrapped, the decline in annual scrappage rates allowed older vehicles, particularly those 12 years and up, to increase significantly in number during 2014 through 2019. This, along with the increase in VIO boosted by lower scrappage, helped fuel aftermarket product growth during these six years.

Copyright 2019 by Lang Marketing Resources, Inc.

NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.