Flying over a city at 30,000 feet, you’d never know there was so much activity below. You can see the skyscrapers or maybe the bright city lights, but you don’t get a sense of the excitement of city life unless you dive in for a closer look.
In some ways, looking at the number of vehicles on the road is similar. At a high level, there were 247.4 million vehicles in operation in Q1 2013 in the U.S., and that number changed by less than 1 percent from a year ago. This is a shift that doesn’t really seem like it would have a significant effect on yearly planning for an automotive aftermarket company.
If you look closer, however, there are a number of noteworthy changes that have taken place over the past year.
In reality, the less than 1 percent change represents a total growth of more than 2 million vehicles (up from 245.1 million in Q1 2012). On average, that represents a 40,000-vehicle increase on a state-by-state basis across the United States.
Obviously, putting that many more vehicles on the road can provide significant opportunities for automotive aftermarket companies.
Scrappage, new vehicles, private sales alter VIO mix
What goes into changing the vehicle mix, and what and where are the greatest impacts that could affect business today? Here are some of the trends from the past year:
- 26.9 million (11 percent) of the vehicle mix changed completely
- With original equipment manufacturer (OEM) sales improving, 14.6 million new vehicles were introduced to the economy. Many of these vehicles are brand-new models, like the Acura ILX, the BMW X1, the Cadillac ATS, the Subaru XV Crosstrek and the Tesla Model S.
- 12.3 million vehicles were taken out of operation due to things like severe accidents, exports and costly mechanical failures.
- 76.3 million (31.1 percent) vehicles moved or changed owner locations
- 37.6 million used vehicles changed hands through dealers or private sales.
- An estimated 39.7 million people changed their address in 2012, affecting where their vehicle resides.
The newly launched Ram brand showed the highest growth percentage overall. However, because it is only in its second model year, that number is a bit skewed. Among brands with a significantly longer track record, the heaviest growth appeared among Asian and European nameplates. Mini (14.8 percent), Kia (13.2 percent) and Hyundai (10.8 percent) were the only brands to record double-digit registration gains.
On the opposite end of the spectrum, the biggest decreases were seen by several orphaned brands, led by Plymouth (17.1 percent), Geo (13 percent), Oldsmobile (12.8 percent) and Isuzu (10.8 percent). Among current brands, Mercury had the biggest decrease at 8.4 percent, followed by Mitsubishi at 3.8 percent and Buick at 3.4 percent.
By volume, Ford had the largest decrease (nearly 500,000 units), while Toyota had the largest gain (more than 900,000 units).
There also were some sizable shifts geographically. Ohio had the largest single-state decrease in vehicles in operation (VIO), losing nearly 300,000 units in a 12-month period. Overall, several states in the Northeast, including Maine, New York, Connecticut, New Jersey and Maryland, all registered losses in VIO.
While it is not surprising that California and Florida had the largest increases in volumes, Wyoming had the largest percentage increase at 8.7 percent.
Obviously, understanding these subtle shifts in VIO is the key to success for any aftermarket organization. For example, it probably doesn’t make a lot of sense to stock extra Mitsubishi parts in Ohio, a slow-selling brand in a state with a dwindling vehicle population. On the other hand, Minis in a growing market like California probably are a winner. There are thousands of similar examples, and it becomes even clearer at lower levels of geography. The companies that dive in to take that closer, ground-level look will be the winners over the long haul.
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