R.L. Polk analyst is optimistic about future sales as buyers eventually replace a growing number of aging vehicles.
TRAVERSE CITY, MI – Americans are keeping their cars and trucks an average of 11.4 years, the highest rate ever recorded by R.L. Polk, Anthony Pratt, director of forecasting-Americas for the statistical organization, says in a Management Briefing Seminars address.
This longevity is traceable partly to the fact that quality of all auto makers has improved drastically in recent years. It also suggests buyers may have been postponing purchases for a variety of reasons.
Whatever the case, the “scrappage rate” bodes well for the future as buyers eventually replace their aging vehicles, Pratt points out.
Changing demographics are presenting new challenges for auto makers. Studies show 22% of Americans are delaying having children, 20% are waiting longer to marry and 24% of the younger group are returning home to live with their parents. All of these impact new-car buying decisions, he suggests.
Another factor to consider is the influence of ethnic groups on purchasing decisions, he says. Polk research shows 26% of new vehicles are registered by Hispanics (12%), African Americans (8%) and Asians (6%).
Polk also tracks electric-vehicle registrations. Pratt says more than half, 52%, are concentrated in five metropolitan areas: San Francisco, Los Angeles, Seattle, New York and Atlanta.
“Why? Because there’s greater availability of products in these areas and better infrastructure,” he says, referring to battery-charging stations. Some 32% of all hybrids are registered in these same cities, Pratt adds.
Polk also looks at loyalty trends – whether owners shift or stay with brands. “Loyalty is lower if an OEM drops a brand,” he says. “If you feel ‘orphaned,’ you tend to be less loyal.”
Another finding: “The shorter the purchase cycle, the higher the loyalty. The ‘sweet spot’ is around four years (of ownership).”