A new metric, Aftermarket Vehicle Average Age, is a “more accurate measure” of a VIO’s aftermarket potential: the average age of cars and light trucks four years and older, states report
Fort Wayne, Ind.—Vehicle average age is a mainstay of estimating the aftermarket potential of a vehicle population. Despite its wide use, Lang Marketing in a recent analysis argues that average age is “out of touch with key aftermarket dynamics and can be misleading.” It states that, for example, when new vehicle sales increase, average age can fall dramatically despite an increase in the number of older cars and light trucks, which are much more important than new vehicles for aftermarket volume.
“Aftermarket metrics should focus on vehicles of greatest significance to aftermarket product volume: cars and light trucks four years and older,” which Lang Marketing calls “aftermarket vehicles” and requires a new means of defining and calculating vehicle average age.
Rather than all vehicles in operation, the study states that aftermarket analysis should focus on those aftermarket vehicles — the cars and light trucks that generate approximately 96% of all light vehicle aftermarket product volume (not including tires and accessories).
Highlights of the report include the following:
Aftermarket Vehicle Average Age
A new metric, Aftermarket Vehicle Average Age, is a more accurate measure of a VIO’s aftermarket potential: the average age of cars and light trucks four years and older.
Statistical Quirks of Average Age
The average age of all vehicles is determined by two factors: new vehicle sales and vehicle scrappage.
Aftermarket Vehicle Average Age is a new metric developed by Lang Marketing that focuses on vehicle scrappage and the number of vehicles at least four years old.
By excluding vehicles aged three years and younger, this new metric focuses on the aftermarket potential of a select segment of the vehicle population rather than all light vehicles on the road.
Enhanced Average Age Metrics
The average age of all light vehicles in operation stood at 12.7 years at the beginning of January 2022.
Aftermarket Vehicle Average Age is considerably higher due to not including newer cars and light trucks. Aftermarket Vehicle Average Age in the U.S. was 14.9 years at the beginning of 2022, according to Lang’s new metric.
Average Age Five-Year History
Using conventional means of calculation, the average age of all vehicles on the road climbed from 12.1 years in 2017 to 12.7 years by 2022. Lang’s Aftermarket Vehicle Average Age was not only higher during both years, but it grew at a much faster pace. Aftermarket Vehicle Average Age climbed from 13.7 years in 2017 to 14.9 years at the beginning of 2022.
The key difference in these two metrics is that the conventional measure of vehicle age includes over 47 million vehicles under four years old at the beginning of 2022. These newer vehicles contribute very little to 2022 aftermarket product volume. This traditional metric also understates the significance of the rapidly growing number of older cars and light trucks (particularly those 12 years and older) on aftermarket volume.
A significant advantage of Aftermarket Vehicle Average Age is that it can be predicted up to three years in the future more accurately than the conventional average age, which depends on estimates of new vehicle annual sales and annual vehicle scrappage.
Average age, calculated in the traditional manner, understates the aftermarket impact of older vehicles, particularly Internal Combustion Engine (ICE) cars and light trucks. Electric vehicles (EVs) on the road are concentrated among cars and light trucks under four years old. Using conventional methodology, these vehicles are given the same significance in average age calculations as older ICE vehicles.
Lang adds that ICE vehicles and EVs make dramatically different contributions to aftermarket product volume, something that Aftermarket Vehicle Average Age can take into consideration.