Monday, April 30, 2007

Built to Last

Some people buy cars because they fall in love with the style, the curves, the attitude of something new. But a lot of people buy cars for the same reason they buy a dishwasher: They need an appliance to do a job.

There's good news for the latter group: Cars really are lasting longer, and that is starting to have an impact on the way the car business works from the factory to the dealership.


 

  Passenger Cars Light Trucks*
  50% survived until age Expected lifetime travel
in miles
50% survived until age Expected lifetime travel
in miles
1977 Data 10.5 107,000 14 128,000
1990 Data 12.5 127,000 15.5 154,000
2001 Data 13.0 152,000 14 180,000
*Light trucks include pickups, vans, and sport utility vehicles under 10,000 pounds GVWR.

Here's an excerpt from a recent WSJ analysis on the subject:

"In 1977, half the cars on the road survived until they were 10.5 years old and you could expect to put about 107,000 miles on a car during its useful life, according to National Highway Traffic Safety Administration data. By 1990, half the cars put into service stayed on the road for 12.5 years, and owners could expect to get 127,000 miles out of their vehicles.

The government's latest survey, using 2001 data, found that 50% of cars were lasting 13 years, and drivers could expect to roll up 152,000 miles on a new vehicle over its life.

The data for light trucks, the category that includes pickups, sport utility vehicles and minivans, make a choppier graph. The government's measure of 50% survival rates for light trucks has bounced from 14 years for 1977, up to 15.5 years in the 1990 sample and back down to 14 years in the 2001 sample. But the expectation for miles traveled over the vehicle's life has risen to 180,000 miles as of 2001 from 128,000 in the 1977 survey.

There are other signs that consumers are hanging on to cars longer. Although 2004 was a pretty good year for new-vehicle sales, with 17.4 million registered, only 11.9 million vehicles were sent to the junkyard. The vehicles scrapped in 2004 were equivalent to just 5.4% of total vehicles registered. A decade earlier, the number of vehicles scrapped was 6.6% of total registered vehicles. At one time, car makers assumed that roughly 8% of vehicles on the road would get scrapped in any given year."

Sales data suggests a lot of consumers put a high value on brands that have a track record of delivering cars that last. The brands that had the biggest market-share gains during the 2000-to-2005 period -- BMW, Toyota, Nissan and Honda -- also had relatively strong records for functional reliability, according to an analysis by Walden Consultants. Chevrolet, Ford, Dodge and Chrysler have lost share or stayed flat in that period, and they also have worse-than-average reliability records.


>

Source:
Cars' Useful Lives Are Longer Than Ever,
Sending Ripples Through Auto Industry

February 27, 2006; Page D3
http://online.wsj.com/article/SB114080394968982644.html

Posted at 06:42 AM in Automobiles | Permalink

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