Report: Vehicles in operation (VIO) boom ends on U.S. roads

“The number of light vehicles in operation (VIO) on U.S. roads remained flat between 2007 and 2013, a circumstance that had occurred only once previously, during World War II when consumer vehicle production in the U.S. was shut down due to the war effort.

“All of that changed beginning in 2014, when the car and light truck population arched into a high-growth curve that expanded the light vehicle population by more than 24 million between 2014 and 2019. However, this VIO boom has come to an abrupt halt in 2020, with the outbreak of Covid-19 and its unprecedented social and economic consequences.”

— Jim Lang, publisher, Lang Aftermarket iReport

Three Major Periods of Vehicle Growth

The growth of vehicles in operation since 2000 can be divided into three major periods: 2000 to 2006, 2007 to 2013, and 2014 to 2019. Lang Marketing measures the annual VIO at mid-year.

These three periods reflect different rates of car and light truck growth (or decline) in the U.S., the changing mix of foreign and domestic nameplates, as well as shifts in the mix of vehicle age groups.

2000 Through 2006

There were just under 220 million cars and light trucks in the U.S. at mid-year 2000. VIO steadily increased over the next six years so that by mid-year 2006, the light vehicle population totaled nearly 246 million.

This surge of 26 million vehicles represented 1.9% annual growth.

2007 to 2013

A dramatic VIO change took place during the following six years, with new car and light truck sales in the U.S. imploding at an unprecedented rate as a result of the 2008 Great Recession.

As a result, the number of light vehicles on U.S. roads plateaued (and even declined slightly) for the first time since World War II (over 60 years earlier), when the auto industry was converted to the war effort.

VIO Goes Flat

From just under 249 million cars and light trucks in the U.S. at mid-year 2007, the VIO sank during the next few years and only moderately recovered to 251 million by mid-year 2013. This period of flat vehicle population continued 50% longer than the only other comparable plateauing of the vehicle count, which occurred during World War II.

2014 Through 2019

New car and light truck annual sales bottomed at 10.3 million during 2009 and then began to rebound over several years, so that by 2014 volume reached 16.5 million. During each of the next five years, annual sales topped 17 million, a record-high pace.

VIO Hit 279 Million in 2019

From 255 million cars and light trucks at mid-year 2014, the light vehicle population in the U.S. reached 279 million at mid-year 2019.

This nearly 2.0% average annual gain marked a dramatic turnaround, with a VIO surge of more than 24 million cars and light trucks between 2014 and 2019.

Abrupt End

Covid-19, and the massive economic and social changes that it has engendered, has brought a sudden end to VIO growth on U.S. roads.

New car and light truck 2020 sales began relatively strong, with January and February volume reaching an annual rate of nearly 17 million vehicles. However, at mid-March, all that changed, as the cases of Covid-19 exploded and lockdown orders were issued across many regions of the country.

New car and light truck sales plunged during the second quarter of 2020 at a rate more severe than during the initial phase of the 2008 Great Recession.

While it is unclear how 2020 annual vehicle sales will end up, many analysts are projecting a downturn of more than 20% in car and light truck 2020 volume, eclipsing the sales plunge of 2008.

VIO Developments

Weak new vehicle sales have eliminated meaningful VIO annual growth during 2020.

It is not clear how long it will take for the new car and light truck market to recover to pre-pandemic levels, but it is likely that the struggling new vehicle market will exert a downward force on the nation’s VIO for a number of years.

This will have significant consequences for the aftermarket.

Six Major Takeaways

  • There have been three distinct periods of VIO growth on U.S. roads since 2000.
  • During the first six years of the new millennium, 26 million cars and light trucks were added to the nation’s VIO, representing 1.9% annual growth.
  • The 2008 Great Recession marked the beginning of a second major VIO phase. From 2007 to 2013, the light vehicle population remained virtually flat, the longest such period since World War II.
  • Beginning with the surge in the 2014 new vehicle market, the number of cars and light trucks on U.S. roads began to increase and the nation’s VIO climbed by 26 million between 2014 and 2019.
  • Covid-19 has caused an abrupt plunge in the new vehicle market that will affect VIO growth for several years.
  • The severity of the 2020 downturn in new car and light truck sales (and how long it will last) is not known at present, but many analysts are pegging it at approximately 20%, greater than the loss recorded during 2008. Weak new vehicle volume will exert a downward pressure on VIO growth for a number of years. All of this will have significant consequences for the aftermarket.

Copyright 2020 by Lang Marketing Resources, Inc.

NOTESpecial thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.