U.S. consumers are using their existing vehicles for longer as the inventory of new cars and light trucks remains constrained due to supply chain challenges, marking an all-time high for the average age, according to a report from S&P Global Mobility.
The average age of light vehicles in operation (VIO) in the United States rose to 12.2 years this year, increasing by nearly two months from the prior year, the report said.
The pandemic led consumers to shift from using from public transport and shared transport to personal cars, and since customers could not upgrade their vehicles, demand for used cars have accelerated and boosted the average vehicle age further, the report said.
Stress on global supply chains worsened in April as COVID-19 lockdown measures in China and the war in Ukraine lengthened delivery times, and air freight costs between the United States and Asia rose, the New York Federal Reserve reported in its latest update to a worldwide index of supply problems.
The average age of light vehicles in operation in the U.S. is expected to rise through 2022 and 2023, as the pipeline for new vehicle production and sales continues to be weighed down by parts shortages, the report said.
Supply chain constraints have led to a decrease in vehicle scrappage, which measures the number of vehicles leaving the vehicle population, and has been a catalyst for the rise in average age over time.
The report also said demand for battery electric vehicles (BEVs) in the U.S. has been expanding rapidly over the past few years.
The average age of electric vehicles in the U.S. is 3.8 years of age this year, down from 3.9 last year, and has been hovering between 3 and 4.1 years since 2016.
(Reporting by Kannaki Deka in Bengaluru; Editing by Amy Caren Daniel)