Americans continue to hold on to their cars and trucks longer than ever before. Nearly six years (71 months) among new vehicle owners is the latest trend. New Polk consumer research shows the opportunities for professionals managing OEM aftersales and the automotive aftermarket operations should have a lot to look forward to given this trend. It's about parts and service business, folks.
Two years ago, I posted a blog on the same behavior and when we started to see a real incline in the average number of months that U.S. vehicle owners retained their car or truck. The trend continues. And the same reasons that applied then, still apply today. More options for longer finance terms...better vehicle quality...a moderate economy placing purchases of large durable goods on hold.
One question that comes up is this: "How can new vehicle sales be expected to rise if Americans continue to hold their vehicles longer?" As of late, most forecasts push new U.S. auto sales upward for 2012. Our light vehicle forecast places new registrations at 13.7 million for 2012. Yet despite a longer average vehicle retention period, new sales can also grow. The trick in understanding this concept is realizing that many American households have more than one vehicle. So the replacement behavior to buy another vehicle can also occur while an older car or truck sits in the driveway.
For decisions impacting automotive marketing plans, the real issue is how to intercept owners and other buyers when they decide to return to market? According to earlier consumer research, customer loyalty to a brand can decline the longer someone holds their vehicle. So long retention periods, particularly among single vehicle-owning housholds, can be a threat when it comes to the choice of staying with the same vehicle brand.
So are you holding on to your vehicle longer? Trading it in to buy another vehicle? Or are you buying and holding? OEM dealers and parts and service businesses eagerly await your answer.