Study: Refreshed Vehicles Going Stale More Quickly

Motorists have the freshest choice of new cars in history, but the vehicles’ ever-shorter shelf life is hitting car buyers in the wallet through increased depreciation as models go out of style a lot faster than they did 30 years ago.

A U.K. industry-data provider, CAP Automotive, says its analysis of new-car model introductions over the past three decades finds a dramatically shorter lifecycle for new vehicles than ever before.

The period between replacement-model introductions or significant facelifts has shrunk from about 10 years in the 1970s and 1980s to three or four years.

“As Ford rolls out its latest-generation Fiesta, and Volkswagen brings out its latest Golf, you can’t help feeling like it’s only two minutes since the previous generation was introduced in each case,” CAP new-car expert David Saville says in a statement.

“The outgoing Fiesta was produced between October 2008 and October 2012, and the previous Golf ran from November 2009 until November 2012.”

Saville says the first-generation Fiesta was introduced in 1976 and ran until 1983. The Golf was introduced in 1974 and remained substantially unchanged until 1983.

“Therefore, over three decades these popular models have gone from a lifecycle approaching 10 years, with minimal technical changes, to around four years with quite often substantial technical changes under the skin each time,” he says.

Saville says much of the reason for the shorter lifecycles is the influence of Asian auto makers that adopted a policy of refreshing their offerings more rapidly than the competition in a bid to rapidly break into European markets.

“It’s a policy that worked well for them and, over time, their success prompted others to follow suit because no manufacturer wants to be left behind when new technology arrives or motorists’ design tastes change,” he says.

Ever-tougher emissions standards are another reason auto makers constantly work to meet rapidly changing European rules. Motorists also contribute to the need for change as they increasingly choose cars that will cost them less in carbon-dioxide-related taxes.

“A model that had an acceptable level of CO2 emissions three years back is now totally out of step with the latest requirements,” Saville says.

“Often, the changes to car design which are aimed at reducing emissions involve altering the shell of the car, to reduce weight or improve aerodynamics, as well as introducing more efficient engines.”

The new look of the vehicle, as well as its improved technology, quickly makes its predecessor appear out of date.

Another significant aspect of shorter model lifecycles, Saville says, is the ease with which the styling of a car can be changed, using modern automotive design techniques.

“Now that computers are at the forefront of vehicle design and large areas of the front and rear of the car are manufactured from easily molded plastics, it is simply easier to make significant cosmetic changes than it used to be,” he says.

“With every manufacturer wanting to get ahead of its rivals, there is now never a time when the next version of a model isn’t on the drawing board.”

While motorists benefit from constantly refreshed choices, they are paying for the ever shorter shelf-life. “On the face of it, the new-car consumer really benefits by always having a choice of… up-to-date models to choose from,” Saville says.

“But this can also have a negative effect because most buyers have a car that they need to dispose of when they come back into the market. If their existing model isn’t the latest offering from that manufacturer, what the industry calls ‘lifecycle depreciation’ kicks in and makes their car less attractive as a private sale or a trade-in.”

The CAP analysis shows greater depreciation is a particular issue for auto makers that have adopted model lifecycles below the standard 3- to 4-year ownership pattern.

“In fact, CAP has seen that certain manufacturers, who have a history of dramatically changing their models over a relatively short period, have begun to take a step back and tone down visual changes so as not to damage the previous-generation model’s secondhand values quickly,” Saville says.