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U.S. consumers scrapped more vehicles than they bought


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U.S. consumers scrapped more vehicles than they bought

BY GREG GARDNER

FREE PRESS BUSINESS WRITER

For the 15 months ended Sept. 30, 2009, Americans scrapped 1.2 million more vehicles than they bought, a historical first, according to R.L. Polk & Co, which has tracked car owning patterns since 1948.

More than 14.8 million cars and light trucks were crushed or recycled in that period, while consumers registered 13.6 million new vehicles.

“It foreshadows what may be pentup demand. The assumption is that those vehicles have to be replaced,” said Lonnie Miller, Polk vice president for marketing and industry analysis.

More immediately, it is good news for service repair businesses and suppliers of aftermarket parts.

The average vehicle on U.S. roads was 10.2 years old during the 15 months of Polk’s most recent analysis. That is the oldest fleet in at least 14 years.

Miller said three factors other than high unemployment and economic uncertainty are leading people to keep driving their vehicles longer. Those are longer warranties, longer-term financing – some new car loans now are for 72-months – and general improvements in quality.

Miller said Polk’s data shows that automakers should sell about 11.5 million new cars and trucks in the U.S. this year, in line with other analysts and internal industry forecasts. While that would be a welcome gain from 2009’s anemic 10.4 million, don’t expect the aging trend to reverse quickly.

Demographic changes such as baby boomers’ down-sizing their housing and cars and growing evidence that consumers now in their 20’s are more likely to buy used vehicles than their predecessors a decade ago mean new cars won’t replace every clunker that hits the recycling yard, Miller said.

“Cash-for-clunkers did assure a one-for-one replacement, but we just can’t assume that when those programs end,” Miller said. “We may see scrappage exceed new vehicles sales at least through this year.”

link:

http://www.freep.com/article/20100330/BUSINESS01/100330029/1331/business01/U.S.-consumers-scrapped-more-vehicles-than-they-bought

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