Good WSJ article on Cars lasting longer than ever

Cars' Useful Lives Are Longer Than Ever,
Sending Ripples Through Auto Industry
February 27, 2006; Page D3

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.

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.
ROAD WARRIORS

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.

Scrappage is one of those indicators that fluctuates year by year, and
industry analysts consume endless cups of coffee debating its true meaning.
A big question is whether scrappage rates will continue to decline (bad for
new vehicle demand), or flatten out because car makers don't develop
technology that extends vehicle life beyond 200,000 miles. There are other
factors, too. Right now, there is about one car for every American of
driving age, giving the U.S. the highest "density" of cars to people of any
country in the world. Some analysts say Americans have three-car garages and
mean to fill them. Others worry that the ratio of cars to people won't
change much.

One force driving decisions to keep older cars on the road could be
demographics: The generation of Americans now hitting driving age is the
largest since the peak of the post-World War II baby boom. Sure, a lot of
these kids want a new Scion tC coupe. But most are probably getting the
family's old Impala or Camry to drive instead.

The median age of passenger cars -- excluding light trucks -- has moved up
over the past decade to 8.9 years from about 7.5 years in 1994. During that
same time, the average age of the light-truck fleet has fallen to 6.4 years
from just over 7 years. That reflects the increasing use of light trucks as
substitutes for family cars, which in turn makes them more likely to get
banged up in traffic accidents or run into the ground on multiple road
trips.

The auto industry hasn't given up entirely on planned obsolescence: When the
industry reports February U.S. car and truck sales this week, it's a cinch
that most of the hot sellers will be new models, with fresh sheet metal or
new technology. It's an article of faith in the car business that nothing
turns a company around faster than a good-looking new car or truck. That's
because time after time this has proven to be true.

Nonetheless, sales data also suggest that 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 -- based on data for repair frequency gathered from consumer surveys
conducted by IndustrialMR Inc. Henry Allessio, managing director at Walden
Consultants, says Walden zeroes in on repairs that take the vehicle off the
road, and concludes that Honda and Toyota have 22% fewer such breakdowns
than the industry average.

For car makers, the challenge is clear: They have push themselves harder to
create cars that basically don't break, and simultaneously develop new cars
that are so compelling in terms of design or technology that some customers
will be willing to buy even though their existing ride probably has four or
five years left in it.

The ripple effects of the longer-lasting car will hit all areas of the
business. Car dealers, for example, have accepted skinnier margins on
new-vehicle sales in part because they were able to make it up in the
service shop. "Historically, dealers have made a significant amount of their
profits, especially the domestics, on warranty work," says Mark Rikess, a
consultant who works with auto dealers. Now, there's less warranty work, and
fewer recalls. That's forcing dealers to be more creative in making their
service operations attractive to consumers who will be paying for the work
with their own money.

"One of our clients is very creative," Mr. Rikess says. "When it's raining,
he will blast out [emails] to his owner base, 'wiper blades are on sale.'
They get 50 people to show up."

This new focus among dealers on generating service business helps to explain
the growing number of coffee bars, work areas and kiddie play rooms in newer
auto stores. Mr. Rikess predicts more dealers also will invest in systems
that allow customers to book service appointments online -- a boon to those
of us who feel that time spent waiting for a car to get repaired is still
time wasted, no matter how good the coffee is.

In article <1208oeibvjruo0c@news.supernews.com> [email]me@hyperx.com[/email]
"Dan J.S." writes:
[color=blue]
> Cars' Useful Lives Are Longer Than Ever,
> Sending Ripples Through Auto Industry
> February 27, 2006; Page D3
>
> [snipped interesting article][/color]

Two thoughts on this...

1) When I bought my first Volvo (440: a hatchback saloon not sold
in the US, AFAIK) in 1989, its literature bragged how the average
life of that company's cars was 20 years. Nowadays, with "Volvo"
being Ford, who knows what dismal figure that has sunk to.

2) I have long felt that vehicle manufacturers should focus on
upgradable products. The body would be built using every trick
in the book to make it endure, despite salt, damp and such minor
damage. Into it would be mounted subunits, each expected to be
redesigned and improved through the vehicle's indefinitely-long
life. This replacement process would make radical customisation
a basic benefit and a factory option from the start. Finally, if
and when the body croaks, transfer good subunits to a new body.
Rinse, lather and repeat. Or flog the good bits on the Standard
Parts Market.
Now some noodle will bleat that this would make vehicles so
expensive, nobody could afford them. Think on this: how long is
it going to be before the energy needed to make each fresh new
vehicle will bring that about anyhow; and how long before every
car is so crammed with fancy systems that throwing it all out in
one lump at scrap time becomes a stupid waste?
If the system came in a bit at a time, soon enough there'd be
a growing pool of "everlasters", whose second-hand value depended
primarily on individual condition, not age -- as with houses. A
bit of imagination and courage is needed here, that's all.
--
Andrew Stephenson

On Tue, 28 Feb 2006 08:44:33 -0600, "Dan J.S." <me@hyperx.com> wrote:
[color=blue]
>Cars' Useful Lives Are Longer Than Ever,
>Sending Ripples Through Auto Industry
>February 27, 2006; Page D3
>[/color]


Not news to me....the '92 Corolla Wagon driver...LOL

--

Scott in Florida

"Scott in Florida" <MoveOn@outa.here> wrote in message
news:u92902hfq34luhiv2idj4mqh9gh87hu60c@4ax.com...[color=blue]
> On Tue, 28 Feb 2006 08:44:33 -0600, "Dan J.S." <me@hyperx.com> wrote:
>[color=green]
>>Cars' Useful Lives Are Longer Than Ever,
>>Sending Ripples Through Auto Industry
>>February 27, 2006; Page D3
>>[/color]
>
>
> Not news to me....the '92 Corolla Wagon driver...LOL
>
> --
>
> Scott in Florida[/color]

I was hoping Mike would see that new study (in the article) that shows that
on average GM and Ford and Chryco vehicles break down 22% more than Toyota
and Honda. But then again he will say the study is full of crap, etc.

Dan J.S. wrote:
[color=blue]
> I was hoping Mike would see that new study (in the article) that shows that
> on average GM and Ford and Chryco vehicles break down 22% more than Toyota
> and Honda. But then again he will say the study is full of crap, etc.[/color]

I don't know why you guys try to discuss anything with him. He's obviously
out of touch with automotive reality.

ANY car will last 20 years of more if given the proper preventive
maintenance. I own a half dozen that are between 55 and 23 years old.
Todays car will last even longer. ;)


mike hunt


"Andrew Stephenson" <ames@deltrak.demon.co.uk> wrote in message
news:1141141671snz@deltrak.demon.co.uk...[color=blue]
> In article <1208oeibvjruo0c@news.supernews.com> [email]me@hyperx.com[/email]
> "Dan J.S." writes:
>[color=green]
>> Cars' Useful Lives Are Longer Than Ever,
>> Sending Ripples Through Auto Industry
>> February 27, 2006; Page D3
>>
>> [snipped interesting article][/color]
>
> Two thoughts on this...
>
> 1) When I bought my first Volvo (440: a hatchback saloon not sold
> in the US, AFAIK) in 1989, its literature bragged how the average
> life of that company's cars was 20 years. Nowadays, with "Volvo"
> being Ford, who knows what dismal figure that has sunk to.
>
> 2) I have long felt that vehicle manufacturers should focus on
> upgradable products. The body would be built using every trick
> in the book to make it endure, despite salt, damp and such minor
> damage. Into it would be mounted subunits, each expected to be
> redesigned and improved through the vehicle's indefinitely-long
> life. This replacement process would make radical customisation
> a basic benefit and a factory option from the start. Finally, if
> and when the body croaks, transfer good subunits to a new body.
> Rinse, lather and repeat. Or flog the good bits on the Standard
> Parts Market.
> Now some noodle will bleat that this would make vehicles so
> expensive, nobody could afford them. Think on this: how long is
> it going to be before the energy needed to make each fresh new
> vehicle will bring that about anyhow; and how long before every
> car is so crammed with fancy systems that throwing it all out in
> one lump at scrap time becomes a stupid waste?
> If the system came in a bit at a time, soon enough there'd be
> a growing pool of "everlasters", whose second-hand value depended
> primarily on individual condition, not age -- as with houses. A
> bit of imagination and courage is needed here, that's all.
> --
> Andrew Stephenson
>[/color]