Impact has consequences for the aftermarket regarding where parts are sold, where vehicles are serviced, and brands used in service and repair
Fort Wayne, Ind.—Nearly 11 million cars and light trucks were not scrapped in the U.S. from 2018 through 2023. The annual vehicle scrappage rates averaged one-sixth lower than during the previous 15 years. Almost all vehicles avoiding the junkyard were internal combustion engine (ICE) cars and light trucks.
According to the latest Lang Aftermarket iReport, “This reduction in scrappage has four “significant” consequences for the country’s vehicles in operation (VIO): the number of cars and light trucks on the road, the share of domestic and foreign nameplate vehicles, the growth of older automobiles, and the ICE vehicles’ VIO domination.”
The following are key takeaways from the analysis.
Modest Annual Scrappage
Vehicle scrappage (vehicles removed from operation) in the U.S. has traditionally increased when new car and light truck sales climb or the numbers of older vehicles expand.
Although new vehicle yearly sales rose to record heights between 2015 and 2019, the next four years were a different story as they suffered an average annual 15% reduction. At the same time, the population of older vehicles (12 years plus) rose to new heights. Nevertheless, yearly scrappage rates trended downward from 2018 through 2023.
Vehicles in Operation (VIO)
Lower vehicle scrappage during 2018 through 2023 increased the nation’s VIO by nearly 11 million cars and light trucks, vehicles that would have headed to the junkyard had the yearly scrappage rates not declined. The nearly 11 million cars and light trucks not scrapped accounted for over 95% of the total VIO gain (just over 11 million) during these years.
Domestic Nameplate VIO
Domestic nameplate cars and light trucks have accounted for nearly three-quarters of all vehicles scrapped over the past 10 years. This means that the domestic nameplate population was increased by about 8 million during this period, slowing the growth of foreign nameplates as a percentage of all cars and light trucks in operation despite their robust share of new vehicle sales.
More Vehicles in Older Age Groups
Older cars and light trucks, particularly those at least 15 years old, represent a disproportionate share of vehicles scrapped. They are more likely than newer vehicles to be “totaled” in accidents (because of their diminished value) and less likely to be spared from scrappage when expensive repairs are needed. Accordingly, the below-average scrappage rates have been a significant factor driving the record growth of vehicles topping 15 years on U.S. roads.
More ICE Vehicles Stay on the Road
ICE vehicles constituted virtually all of the nearly 11 million cars and light trucks that had not been scrapped from 2018 through 2023. The total number of ICE vehicles not scrapped amounted to about three times the sales of electric vehicles over these six years, both Plug-In Hybrid Electric Vehicles (PHEV) and Battery Electric Vehicles (BEV).
As a result, ICE vehicles accounted for over 98% of the 2023 VIO, a much larger share than if scrappage rates had remained high and the nearly 11 million ICE vehicles had been scrapped.
Aftermarket Consequences
Low scrappage rates have impacted the aftermarket in three important ways:
• The expanding VIO and growth of older cars and light trucks facilitate aftermarket product growth.
• The impact of below-average scrappage on the foreign and domestic nameplate mix has consequences for the aftermarket regarding where automotive parts are sold, where vehicles are serviced, and the brands of products used in vehicle repair and maintenance.
• Similarly, the dominant ICE share of the VIO has significant aftermarket consequences ranging from the brands of repair products used to the total volume of aftermarket products and where parts and services are purchased.
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