Sunday, December 26, 2010

Vehicle Sales: Fleet Turnover Ratio

by Bill McBride on 12/26/2010 07:40:00 PM

Way back, during the darkest days of the recession, I wrote a couple of optimistic posts about auto sales - Vehicle Sales (Jan 2009) and Looking for the Sun (Feb 2009). By request, here is an update to the U.S. fleet turnover graph.

Fleet TurnoverClick on graph for larger image in graph gallery.

This graph shows the total number of registered vehicles in the U.S. divided by the sales rate through November 2010 - and gives a turnover ratio for the U.S. fleet (this doesn't tell you the age or the composition of the fleet).

The wild gyrations in 2009 were due to the cash-for-clunkers program.

Note: Number of registered vehicles estimated. This is for total vehicles, not just light vehicles.

The estimated ratio for November was just under 20 years - still very high, but well below the peak of 26 years. The turnover ratio will probably decline to 15 or so over the next few years.

Vehicle Sales The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Note: dashed line is current estimated sales rate. The current sales rate is still near the bottom of the '90/'91 recession - when there were fewer registered drivers and a smaller population.

Light vehicle sales were at a 12.22 million seasonally adjusted annual rate (SAAR) in November. To bring the turnover ratio down to more normal levels, unit sales will have to rise to 14 or 15 million SAAR. Of course cars are lasting longer - note the general uptrend in the first graph - so the turnover ratio probably will not decline to the previous level. Also this says nothing about the composition of the fleet (perhaps smaller cars).

Earlier:
Schedule for Week of December 26th
Summary for Week ending December 25th