Polk says buyers keeping cars longer
A number of factors contributed to the increased length of ownership, according to Polk, which analyzed vehicle registration data through Sept. 2011. First, consumer spending remains conservative in a still-weak job market with relatively high unemployment rates. Second, many buyers have used longer-term financing options to secure more affordable payments. Third, vehicles produced in recent years have been more durable and more reliable than their predecessor. Various manufacturers are also offering longer warranties for new vehicles, reducing the risk for consumers who want to keep vehicles longer.
The new findings, coupled with the increased average age of vehicles on the road, which now stands at 10.8 years for cars and light trucks combined, creates new opportunities for companies making after parts,
"As the aftermarket prepares to service this aging vehicle population, this creates concerns about appropriate parts inventory," said Mark Seng, global aftermarket practice leader at Polk. "As a result of our analysis, we're currently working with customers in the aftermarket to help them prepare for increasing demand throughout the entire supply chain," he said.
Moreover, Polk analysts don't expect new vehicle sales will reach pre-downturn levels of 16 million units until 2015. Nor does the firm expect to see an immediate decline in the length of ownership trend over the next few years, according to Seng. "Unemployment rates continue to be high, and we expect many consumers will suffer from the lingering effects of the downturn, further contributing to longer ownership trends," he said. By Joseph Szczesny