Special Report

2007 Year in Review

The number of cars and trucks traveling U.S. roads at the end of calendar 2006 increased at a little over half the rate of the prior year, thanks to a slowdown in new light-vehicle sales and an increase in the number vehicles consigned to the shredder.

According to the U.S. Federal Highway Admin.’s most-recent compilation of state registration data, there were 246,750,731 cars and trucks licensed to operate on Dec. 31, 2006. (FHWA data tends to overstate the actual number of vehicles on the road, because the agency does not attempt to compensate for multiple-state registrations of the same vehicle).

That was up just 2.7 million units, or 1.1%, from the 244,031,749 units tallied a year earlier, when a 4.7 million-unit gain represented a 2% increase from the 239,388,503 vehicles counted at the end of 2004.

Related document: Vehicles in Operation in U.S. by Region

In fact, it masked lowest rate of growth since a 0.2% increase was recorded in 2002 – as payback for the 4.1% surge posted in 2001 – and came just as the country was showing the first signs of an economic slowdown along with a surge in gasoline and diesel fuel prices that zinged the light-truck market.

While light-truck registrations grew at a slower 3.5% pace, or 3.4 million units, in 2006, compared with 4.2%, or 3.9 million units, in 2005, record sales of medium- and heavy-duty trucks to fleet buyers anxious to avoid purchasing costlier, less efficient, but more environmentally friendly, units in 2007 spurred a 5% rise in medium/heavy truck registrations.

At the same time, a 1.1 million-unit, 0.9%, decline in the car population in 2006, to 136,893,995 from 138,083,451 the previous year, helped bolster trucks’ share of total registrations to a record 44.5% from the prior peak of 43.4% in 2005. That capped a string of annual increases stretching back at least through 2000, when they accounted for just 39.5% of the vehicles on the road.

Regionally, car and truck registration results varied sharply in 2006.

The Mid-Atlantic region, in a significant reversal, had 3.1% fewer cars and trucks registered at the end of 2006 than it did the year before. In 2005, registrations in the region grew 3.1%.

Although trucks accounted for a slightly higher share of the Mid-Atlantic total, the area remained the most car-dominated in the country in 2006 at a 66.9% share vs. 67.5% in 2005.

In the New England states, registrations also were down for the second consecutive year with a 0.7% contraction in 2006, following a 0.2% decline in 2005. That was preceded by a mere 1.0% gain in 2004.

New England also remained the second-most car-dominant region in the country, with cars accounting for 61.1% of the 2006 total, compared with 61.8% the previous year.

The West South Central region was the only other area to have fewer vehicles registered in 2006 than the prior year. The number of vehicles there dipped 1.3%, compared with a 4.7% gain in 2005.

On the other hand, 3.3% more cars and trucks were registered in the South Atlantic region in 2006, the highest regional increase for the year, compared with a gain of 2.5% in 2005. And unlike the East Coast, trucks accounted for a larger share of South Atlantic registrations, 47.3% in 2006, compared with 43.8% in 2005.

Rising fuel costs, not surprisingly, helped spur further growth in the number of motorcycles operating in 2006, to a record 6,798,797, up 7.0% from 6,356,147 in 2005.

Added to the 347,573,410 cars, trucks and buses tallied in 2006, motorcycles pushed the total number of road vehicles in the U.S. to 254,372,207, up 1.3% from 2005’s 251,194,949.

Meanwhile, data from R.L. Polk Co. showed the scrappage rate – the number of vehicles scrapped as a percentage of total registrations – for cars and trucks combined increased to a 4-year high of 5.2% for the 12-month period ended July 1, 2007, from 5.0% the previous year.

Cars were scrapped at a 5.5% rate in 2007, vs. 4.9% in 2006, while light-trucks increased to 5.2% from 5.0%. But the scrap rate for all trucks combined fell to 4.8% from 5.2%, as fewer medium/heavy units met the crusher.

Related document: U.S. Vehicle Median Age and Scrappage Rates

At the same time, the median age of trucks on the road in the 2007 count increased to 7.3 years, according to Polk, from 6.9 years in 2006, while that of cars remained 9.2 years.

Polk also said a study of new hybrid vehicle registrations showed they increased 38% to 350,289 in calendar 2007 with the top 10 states accounting for 214,150, or 61.1% of the total.

California continued to lead with a 35.4% gain to 91,417 units that accounted for 26.1% of all new hybrids registered nationwide.

Florida was distant second. Despite a 49.5% growth rate, only 19,383 hybrids were registered there in 2007, accounting for just 5.5% of the national total.

In addition to California and Florida, other top states were New York (17,385), Texas (17,196), Washington (13,107), Illinois (13,094), Virginia (11,952), Pennsylvania (11,089), Massachusetts (9,982) and New Jersey (9,645).

According to the study, buyers tended to purchase hybrids within the same segment as their previous vehicle, with small cars, midsize cars (including Toyota Prius) and midsize SUVs accounting for 55% of new hybrids registered in 2007.

abinder@wardsauto.com