Cars, vans, SUVs, and different autos drive in visitors on the 405 freeway via the Sepulveda Pass in Los Angeles, California, on August 25, 2022.
Patrick T. Fallon | AFP | Getty Images
DETROIT — The common age of passenger autos on U.S. roadways climbed to a report this yr, as automotive house owners maintain on to their autos longer amid low provides of latest autos and sky-high costs.
The common age of a light-duty automobile on U.S. roads rose by greater than three months — the very best year-over-year improve for the reason that Great Recession in 2008-2009 — to 12.5 years as of Jan. 1, in accordance with a brand new report Monday from S&P Global Mobility. That features a 3.8% improve for passenger vehicles to 13.6 years and a 1.7% uptick in vans, SUVs and crossovers to 11.8 years.
Rising automobile ages are excellent news for aftermarket components suppliers like AutoZone, O’Reilly Automotive and Advance Auto Parts. It can also profit supplier service facilities, but it surely does not bode properly for brand spanking new automobile sellers and gross sales.
“The aftermarket and the repair market as a whole is definitely a winner as the average age continues to grow,” stated Todd Campau, affiliate director of aftermarket options for S&P Global Mobility. “The more older vehicles that are on the road, the more repairs they need.”
In whole, S&P Global Mobility stories there are greater than 284 million autos in operation on U.S. roads. That’s up barely from 283 million final yr.
S&P stories the typical automobile age final yr skilled upward stress initially attributable to provide constraints that triggered low ranges of latest automobile stock, after which by slowing demand as rising rates of interest and inflation lowered shopper demand within the second half of the yr.
New and used automobile costs have been elevated for the reason that begin of the coronavirus pandemic, as the worldwide well being disaster mixed with provide chain points triggered manufacturing of latest autos to sporadically idle. The prices and shortage of stock led shoppers to purchase extra used autos, growing these costs as properly.
In addition, the Federal Reserve’s strikes to lift rates of interest 10 occasions since March 2022 haven’t assisted new automobile gross sales.
Cox Automotive stories the typical listed worth of a used automobile was $26,799 in April — the very best worth level this yr. The common transaction worth for a brand new automobile was $48,275 in April, up 3.7%, or $1,744, from a yr earlier.
Trucks dominate
Part of the pricing improve is because of the automobile combine, swinging away from passenger vehicles to utility autos.
The variety of passenger vehicles on the street will fall beneath 100 million for the primary time since 1978, in accordance with S&P, as U.S. shoppers demand bigger autos that automakers are fortunately constructing at larger revenue margins.
“Pickup trucks have stayed healthy. … They’ve stayed pretty consistent,” Campau stated. “The real driver here is the crossover utility vehicle that really has displaced the passenger car for most families.”
In 2022, S&P stories 78% of all new autos registered within the U.S. final yr had been crossovers, vans or SUVs.
EVs growing
Battery electrical autos, or BEVs, is one other rising subsegment of latest autos. S&P stories new BEV registrations jumped 58% yr over yr, to almost 758,000 items in 2022.
Of the almost 2.3 million BEVs registered within the U.S. from 2013 to 2022, S&P stories about 2.12 million are nonetheless on the street at the moment. That equates to a median age of three.6 years for lively autos.
The improve in EVs comes as automakers spend billions of {dollars} to extend the variety of new all-electric vehicles and vans amid tightening authorities emissions rules globally.
For instance, President Joe Biden set a nationwide goal in 2021 for electrical autos to signify half of all new auto gross sales by 2030.
Source: www.cnbc.com”
