Lang Aftermarket iReport: Billions of miles shift to older vehicles
“The over 20% plunge in 2020 new vehicle sales (and the open question of when the new vehicle market will return to pre-Covid-19 levels) will reduce the number of vehicles under 5 years old on U.S. roads. The average age of cars and light trucks will increase and older cars and light trucks will be driven more annual miles in the U.S.
“Lang Marketing estimates that over 410 billion miles will shift from vehicles under 5 years of age to older cars and light trucks between 2020 and 2023. This has significant consequences for the use of aftermarket products among older vehicles.”
— Jim Lang, publisher, Lang Aftermarket iReport
Struggling New Vehicle Market
The record plunge in new vehicle sales during 2020 (greater than the decline during the first year of the 2008 Great Recession) followed by several years of “soft” new vehicle sales mean that millions fewer new cars and light trucks will be sold during 2020 through 2023 than would have been tallied had the average volume of the previous five years continued through this period.
As a result, there will be fewer cars and light trucks under 5 years old on U.S. roads.
10 Million Fewer Vehicles
Lang Marketing estimates approximately 10 million fewer light vehicles under 5 years old will be on U.S. roads during 2023 compared to 2019 than if annual sales not been hit by the onslaught of Covid-19.
Older Vehicles Pressed Into “Harder” Use
As a result of this reduction in vehicles under 5 years of age, older cars and light trucks will be pressed into “harder” service (driven more annual miles).
Lang Marketing estimates that over 410 billion miles will be transferred from vehicles under 5 years of age to older cars and light trucks during 2020 through 2023.
Not All Miles Driven Are Equal
The over 410 billion miles transferred to older vehicles between 2020 and 2023 will generate more aftermarket product volume per mile, since the wear and tear of these “transferred” miles will be experienced by older vehicles.
Mileage on older vehicles generates greater repair product use per mile than the same miles on new cars and light trucks.
Lang Marketing estimates that vehicles 5 years and older average over three times the aftermarket product use per mile of younger cars and light trucks.
Higher Odometer Readings
As older vehicles are driven more annual miles, accumulated mileage on U.S. vehicles will reach new heights, up an average of more than 10% per vehicle over the next five years.
This means that many aftermarket products will record an additional replacement cycle as a result of older vehicles accumulating record-high mileage (odometer readings).
Repair-Age “Sweet-Spot” Expanded
As a consequence of more mileage on older vehicles in the U.S., the upper end of the repair-age sweet-spot for aftermarket product use (traditionally defined as 6 to 10 years of age) will be pushed higher.
Boost for Aftermarket Growth
The more than 410 billion miles that will be transferred during 2020 through 2023 from cars and light trucks under 5 years of age to much older vehicles in operation will increase aftermarket product use per mile travelled on U.S. roads. This is important for aftermarket product growth since light vehicle total annual miles will not increase significantly over the next few years.
Six Major Takeaways
- Approximately 10 million fewer light vehicles under 5 years old will be on U.S. roads during 2023 compared 2019, as a result of the onslaught of Covid-19.
- Lang Marketing estimates that over 410 billion miles will be transferred from vehicles under 5 years of age to older cars and light trucks between 2020 to 2023.
- This transferred mileage will generate more aftermarket product use per mile during this four-year period than it would have otherwise, since the wear and tear generated by these miles will be directed to older vehicles rather than to cars and light trucks under 5 years of age.
- As older vehicles are driven more, accumulated miles on cars and light trucks in the U.S. (odometer readings) will reach record-high levels, adding another cycle of usage for many types of replacement parts.
- More mileage on older vehicles will help extend the upper end of the vehicle repair-age “sweet-spot” for aftermarket product use.
- These developments will help boost aftermarket product use over the next four years
Copyright 2020 by Lang Marketing Resources, Inc.
NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.