Automotive Forecast

I think there's some good news based on our annual analysis of the U.S. vehicle population. "For whom and why?", you ask? Read on.

The U.S. light vehicle forecast is expected to be 11.5 million units for 2010. That's up from 2009's 10.4 million... we'll take any gains possible. Good news for dealers and automakers.
The average age of light vehicles on the road has been creeping up as well. It's just north of 10 years as of September 2009. A decade ago it was 8.8 years. This means vehicle repairs needs should continue to increase for service and repair facilities. Go get 'em aftersales folks!
The length of time you and I are typically holding our vehicle is also increasing. See my earlier blog post. Again, good news for both the dealer network and independent service and repair facilities.
Light vehicles are scrapping out at a rate of 6.1%. The trick here for marketers is to find out which segment of us vehicle owners are actually eliminating vehicles at a higher rate than other consumer groups. Over the last 60 years, this measure of possible vehicle demand has actually averaged around 6.3% for all cars and trucks (counting trucks in the commercial vehicle market - see the below graph). While the scrappage rate may be a bit higher this year, it's NOT directly implying new vehicle sales will be shooting upward to make up for the "scrapped" or lost units (new sales are driven by several factors, not just a scrappage rate). There are a lot of older vehicles that are natually "dying" now, yet you can't assume this will be compensated by a 1-for-1 replacement. Case in point: if people are holding onto their vehicles for longer periods (see above), it implies you don't get more sales with increasing scrappage rates in all cases.

My question to you: how reliable have you found these factors to be in your business and how do you use such trends?