Wednesday, September 10, 2014
Vehicle Sales: Fleet Turnover Ratio
Back in early 2009, I wrote a couple of posts arguing there would be an increase in auto sales - Vehicle Sales (Jan 2009) and Looking for the Sun (Feb 2009). This was an out-of-the-consensus call and helped me call the bottom for the US economy in mid-2009.
Here is an update to the U.S. fleet turnover graph.
This graph shows the total number of registered vehicles in the U.S. divided by the sales rate through August 2014 - and gives a turnover ratio for the U.S. fleet (this doesn't tell you the age or the composition of the fleet). Note: the number of registered vehicles is estimated for 2012 through 2014.
The wild swings in 2009 were due to the "cash for clunkers" program.
The estimated ratio for August was just over 14 years - back to a more normal level.
Note: I argued the turnover ratio would "probably decline to 15 or so eventually" and that has happened.
The second graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is current estimated sales rate.
The current sales rate is now near the top (excluding one month spikes) of the '98/'06 auto boom.
Light vehicle sales were at a 17.45 million seasonally adjusted annual rate (SAAR) in August.
I now expect vehicle sales to mostly move sideways over the next few years.