U.S. vehicles getting older and larger

MOUNTAIN VIEW, Calif. (April 3, 2014) — Auto maintenance shops are probably seeing more domestic nameplates, pickup trucks and older models driving in than they did a year ago, according to a new Frost & Sullivan Inc. analysis of vehicle sales trends in 2013.

Sales of passenger vehicles grew 7.5 percent last year to 15.6 million, according to Automotive News, a sister publication of Tire Business. Light trucks were more popular as sales grew 11 percent, while passenger cars increased just 4 percent.

Frost noted that despite the slow economic recovery and high fuel prices, consumers and fleets continue to flock to larger vehicles. The Mountain View-based market research firm predicts pickup trucks, SUVs, crossovers and minivans will make up about 53 percent of all registered light vehicles by 2020, up from an estimated 49 percent in 2013.

A small increase in economic growth since the recession of the mid-2000s, coupled with a year of fuel prices below the $4 per gallon threshold, has consumers returning to their pre-crisis preferences for larger vehicles from Detroit 3 auto makers, Frost said.

It will take a few years for these trends to enter the aftermarket, however. Until then, demand for Asian-nameplate parts will continue to grow faster than for Ford, General Motors or Chrysler models, which tend to be older and more likely to be replaced over the next few years rather than repaired.

About a third of registered U.S. cars and light trucks are manufactured by Asian vehicle makers, with the Detroit 3 accounting for 59 percent. Expected higher scrappage rates for domestic-brand vehicles will push the share of Asian nameplates in operation to approximately 38 percent by 2020, Frost predicted.

European brands, such as Volkswagen, BMW and Mercedes-Benz, will continue to account for less than 10 percent of vehicles in operation.

The study said that manufacturers and distributors of brake pads, starters/alternators and other application-specific parts and accessories will see demand for light truck products increase faster than the same components for passenger cars over the next three to five years.

Prevailing sales trends also point to higher demand for parts for Fords (up 11 percent last year), Dodges (up 14 percent), Rams (up 22 percent) and Cadillacs (up 22 percent). By contrast, Toyota- and Honda-brand sales were up just 7 percent last year, and Hyundai Group sales increased 3 percent, according to Frost.

The Frost report also expects the average U.S. vehicle age to edge up to 10.9 years by 2020 from 10.5 years in 2013. Despite the recovery in new vehicle sales, consumers are generally keeping their vehicles longer than they did in the past. One reason for this is that overall quality has improved, resulting in a longer service life for the typical automobile, Frost said.

With new car sales expected to outpace scrappage rates, the number of vehicles in operation in the U.S. is forecasted to reach 271.7 million, up 10 percent from today.

“On the whole, these patterns are positive for aftermarket parts and service suppliers. Older vehicles tend to require more parts and service, boosting overall revenue across the value chain,” said Stephen Spivey, program manager for Frost's automotive & transportation aftermarket research practice.

“Larger vehicles typically need bigger, more expensive parts, and the growth of non-domestic nameplates provides opportunities for increased specialization to enhance profitability.”