Fuel Economy Improvements and Aging Vehicle Fleet Mean U.S. Auto Industry Strength to Continue, Says MaritzCX
Pent-up Demand for an Additional 13 Million Vehicles, Based on MaritzCX Analysis of Census Bureau Data and MaritzCX Proprietary Industry Study
SALT LAKE CITY – July 15, 2015 – The bull market in U.S. light-vehicle sales has plenty of room left to run, according to recent industry analysis by customer experience company MaritzCX.
“What’s interesting about this most recent auto industry expansion, after the downturn in 2009, is that increases in new buyers or increases in household fleets aren’t responsible for today’s growth,” noted Dr. Dave Fish, senior vice president of expert services at MaritzCX. “So how are we getting such expansion in a mature market such as the U.S.? Our analysis reveals that buyers are replacing older than usual vehicles with newer ones that have better fuel economy—and there is still pent-up demand for more new vehicles.”
Fuel Economy Matters
A big driver of turning in much older vehicles for newer ones is the demand for better fuel efficiency. In 2002, only 31 percent of new buyers from the MaritzCX New Vehicle Customer Study rated fuel efficiency as “extremely important,” not even making the top ten most important purchase reasons in that year.
By 2014, the need for fuel economy skyrocketed to 45 percent, putting miles per gallon (mpg) to #3 of the most important purchase reasons for new vehicle buyers in the U.S., only trailing “value for the money” and “reliability” The industry has kept up by increasing vehicle fuel efficiency by 24 percent in passenger cars (36-mpg) and 13 percent for light-trucks (21.4-mpg) during that same period.
Brightening economic conditions, with a customer eye toward more fuel efficiency, appear to be conjuring up laggard buyers. These buyers have been waiting for a sense of economic stability before making a major family purchase like a new car or truck. But how long can this sales expansion continue? When will the supply of these buyers who’ve held out so long begin to wane?
“That largely depends on the natural run rate on U.S. vehicle sales which is conservatively around 15.6 million units, based on historical light-vehicle sales data since the beginning of the century. This is a number we have been well under from 2009 to 2013,” said Fish.
“Provided we hit the anticipated 17+ million units sold in 2015, those dark years of 2008 through 2013 have left us with a demand of about 13 million additional units after 2015. Obviously, many of those folks will continue to delay or make other choices, like used vehicles, but with even half that many units in play, it looks like the good times may roll for some time into the future,” added Fish.