Lang Aftermarket iReport: Up to 800 billion miles will be lost to COVID-19
“Lang Marketing estimates that 2020 driving by all types of vehicles fell by more than 400 billion miles in the U.S., well below the 3.3 trillion miles recorded in 2019. This was the fourth year since 2008 that mileage on U.S. roads declined.
“Last year, COVID-19 caused the largest plunge in annual driving since World War II, more than the combined drop in mileage of the three previous annual declines over the past 12 years: 2008, 2009, and 2011. Mileage in 2021 will post a significant gain over last year, but it will take some time before annual driving returns to pre-2020 levels.”
— Jim Lang, publisher, Lang Aftermarket iReport
Earlier Mileage Reductions
The three earlier reductions in annual miles since 2008 were each just a fraction of the 2020 mileage plunge. Driving fell 1.8% during 2008, a result of the Great Recession, followed by smaller driving declines in 2009 and 2011 (0.7% and 0.6%, respectively).
The approximate 12% plunge in 2020 driving was nearly five times the combined loss of mileage of the other three years of reduced driving since 2008.
The reductions in annual miles (2008, 2009, and 2011) occurred over a four-year period during which the number of vehicles in operation (VIO) fell by a total of more than 1%.
Lang Marketing estimates that there were fewer vehicles on U.S. roads at the end 2020 than 12 months earlier. This will mark the first VIO annual reduction since 2012.
What began as a health issue in mid-March 2020, quickly developed into a social and economic crisis. Never before has the behavior of U.S. citizens been so rapidly and dramatically changed over a short time, primarily by public mandate.
The two most unusual aspects of the historic drop in 2020 mileage were its magnitude and how much greater it was than the 2020 VIO decline. In previous years, driving declines happened concurrently with VIO reductions of similar magnitude.
Some analysts point to the narrowing monthly gap between 2020 and 2019 driving as an indication that mileage levels will soon return to pre-2020 levels.
However, the unprecedented surge in remote working, high unemployment, and economic uncertainty all strongly suggest that there will be a “step-down” in monthly mileage (between 2% and 4%) that could persist for an extended period.
Lang Marketing predicts that it will be several years before annual mileage returns to pre-2020 levels, and even longer before there will be sustained growth beyond the 3.3 trillion miles recorded in 2019.
If recent history is any indication of how long it will take for driving to return to pre-Covid levels, the fact that it took seven years for annual miles to shake off the impact of the 2008 Great Recession is sobering.
Up to 800 Billion Miles Could be Lost
Depending on how long it takes annual mileage to return to pre-2020 levels, the total mileage loss due to Covid-19 could be double the estimated 400 billion miles lost during 2020.
Lasting Aftermarket Impact
No matter how long it takes for driving levels to regain their pre-Covid levels, the billions of lost miles will leave a legacy of lower odometer readings, and the resulting lack of “wear and tear” on vehicles will put downward pressure on aftermarket product and service volume for a number of years.
Six Major Takeaways
- 2020 was the fourth year of lower annual mileage on U.S. roads since 2008. See the 2021 Lang Aftermarket Annual for a 35-year analysis of annual mileage in the U.S.
- The estimated 400 billion fall in mileage during 2020 was nearly five times greater than the accumulated mileage declines of the three recent years in which U.S. mileage failed to grow: 2008, 2009, and 2011.
- Following the Great Recession, it took seven years for annual miles to recover to pre-2008 annual levels.
- While driving eventually will return to pre-Covid levels, it is yet unclear how permanent changes in social and business behaviors (social distancing, remote working, etc.) could reset the driving behavior of Americans.
- During the three previous reductions in annual mileage since 2008, the drop in driving was matched approximately in magnitude by a decline in the VIO. During 2020, however, the plunge in driving was much greater than the VIO annual decline.
- The more than 400 billion “lost miles” during 2020 (and up to 800 billion total lost miles) will have a lasting impact on the aftermarket as a result of the wear-and-tear on vehicles that did not occur due to Covid-19.
Copyright 2021 by Lang Marketing Resources, Inc.
NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.