IHS prediction: A look at cars on road in 2020


In the last seven years, the average age of vehicles on the road in the U.S. increased by 15 percent to 11.5 years.

How will that rate change in the next five years? According to Mark Seng, the global aftermarket practice leader for IHS Automotive, the company’s prediction is an increase in overall average age of about 3 percent by 2020.

While that may not sound like a lot, where dealers can make strategic moves to position themselves for maximum potential profit is to look at which segments will see the biggest growth.

According to IHS, by the year 2020, the segment of vehicles aged zero to 5 years will see the biggest growth – a predicted jump of 24 percent. The volume of vehicles over 12-years-old is expected to increase by 15 percent, while the 6- to 11-year-old segment is anticipated to see a decrease of 11 percent.

If you’re not catching on already, why is this good for you? For one, those older cars will need to be worked on. Therein lies an opportunity for service of all kinds. IHS predicts that the vehicles in operation that are 16-years-old or older will number at approximately 76 million — quite the jump if you consider there were just 35 million vehicles in that age range in 2002.

Talking at the Automotive Aftermarket Products Expo in Las Vegas on Wednesday, Seng says the most successful companies will be those that take advantage of the age shift.

“The aftermarket may need to begin thinking differently about the repair ‘sweet spot’ as vehicles age and consumer behaviors change. Success will require that businesses adapt to the evolution in a timely manner,” Seng said. “Nimble aftermarket organizations that embrace and prepare for the changes underway will have the greatest opportunity to succeed moving forward.”

Segment shifts more toward imports and crossovers?

Looking at U.S. light vehicle sales, IHS points out the dominance sales of compact CUVs, traditional mid-size sedans, traditional compacts and full-size pickups, which, together, made up over 58 percent of new-vehicle registrations made last year. The company anticipates that the CUV phenomenon will continue in the near term while compact and mid-size sedans will continue to maintain popularity.

Import vehicles currently represent a 27.3 percent share of vehicles in operation in the U.S. IHS expects that percentage may jump to 47 percent by 2020. Imported light trucks have seen a 10 percent jump in share since 2007, now currently representing 15.7 percent of the VIO in the U.S.

Also since 2007, the share of domestic cars has decreased by 2 percent, to 37.4 percent of vehicles in operation, while domestic light trucks represent 19.6 percent, down nearly 8 percent since 2007.

IHS also estimates that nearly 60 percent of light vehicle production will be built on global platforms, giving companies another opportunities to know what to expect and prepare in terms of parts and service.

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