Blog Posts by Tom Libby

New premium vehicle registrations tend to be skewed to the Northeast, but after about three years of ownership, some of these vehicles start to migrate to other areas of the U.S., including the Midwest, South and West. As the value of these high-end vehicles decline over time, they become affordable to households with lower (relative) incomes. The Northeast’s share of new luxury registrations is in the 27-28% range, but by the time these same vehicles have been on the road for four years, only about 20% are in the Northeast while the West, Southeast and Midwest begin to gain share. These three regions of the country continue to gain share of all luxury vehicles in operation (VIO) during the fourth through tenth year of ownership.

The mix of luxury vehicles on the road becomes less important as the vehicles age, because there are fewer and fewer of them on the road. The mix of luxury vehicles eight years old or older (as a percent of all luxury vehicles on the road) starts to drop off and continues to decline as the years add up. Exceptionally old luxury vehicles – 20 years old or older – are concentrated in the West, probably because of the climate. Almost 40% of all 30-year old luxury vehicles are located here. (One possibility is that the only luxury vehicles still running after 30 years are on West Coast roads because all others have suffered from the climate and been scrapped.)

For premium makes to maintain strong relationships with their existing customers, whether the customers are the initial owners or the second or third-time owners, management teams will need to know where these customers and cars are located. With this information, the teams can maximize aftersales, customer retention and loyalty. Vehicles In Operation (VIO) data are available down to the state, market, dealer and ZIP Code levels.



Posted by Tom Libby, PolkInsight Advisor, Polk (09.15.2011)